Organized by the B Team, Center for Economic and Social Rights, Christian Aid, Financial Transparency Coalition and Oxfam
Brief description of the session:
When working well, business tax contributions fund key programs crucial for gender equality and women’s rights, including education, health, and care services. In contrast, when businesses avoid tax, public services go under-funded and consumption taxes are often increased, both of which disproportionately burden women. This session will drill down on the connection between responsible corporate tax practice and the corporate responsibility to respect human rights set out in the UN Guiding Principles on Business and Human Rights. It will engage discussants from the audience in a multi-stakeholder dialogue on methods for driving responsible corporate tax practice that avoids adverse impacts on human rights.
Session objectives:
This session will draw out practice-based recommendations on how the UN Guiding Principles’ three pillars of “Protect, Respect and Remedy” can be leveraged by governments, companies and communities to ensure responsible tax practice. In order to enable a concrete and solution-oriented discussion the session will have a special focus on connecting responsible tax practice and women’s rights, and in particular how to rectify the often-hidden women’s rights risks posed by certain corporate tax practices. It will also focus on how companies are beginning to understand how paying tax in a transparent and responsible way is an important way in which they can positively contribute to the communities in which they operate.
Key discussion questions:
o What is the relationship between tax policy and human rights, in particular women’s rights?
o What are the duties and responsibilities of governments under the UN Guiding Principles’ Pillar I (State duty to protect) as related to business taxation? What are some examples of good state practice to enable corporate human rights due diligence on tax matters?
o How can Pillar II of the Guiding Principles (corporate responsibility to respect) be leveraged to restore more responsible business taxation in practice? What are examples of good corporate tax behavior in line with the corporate responsibility to respect human rights?
o What is the role of other stakeholders (e.g. investors, civil society organizations) in encouraging companies to view responsible tax practice as a way to meet their corporate responsibility to respect human rights – and that avoiding adverse impacts from irresponsible tax avoidance in fact would be a significant positive contribution to sustainable development in the societies in which they operate?
o What role does political influencing play, and to what degree does business’ tax lobbying affect both the state duty to protect and business’s responsibility to respect women’s rights?
o In light of Pillar III of the Guiding Principles (access to remedy for victims), what would effective remedy for corporate tax abuse look like, in practice?
Format of the session:
After an initial introduction by the moderator, this session will kick off with the presentation of a brief illustrative case of the risks irresponsible corporate tax practices pose to women’s rights. Practitioners from business, civil society, community, and government will then engage in a round-table discussion on how the UN Guiding Principles could be leveraged to address this type of situation.
Background to the discussion:
There is growing consensus amongst governments, the human rights protection system and civil society that taxation—in particular corporate tax policy—is a vital tool for the realization of economic, social and cultural rights. Ample evidence also suggests that women and girls are hurt the most when the ability of the ability of states to realize such rights is hampered by tax losses. Likewise, more and more companies are recognizing that paying their fair share of tax is a fundamental business responsibility.[1] Business groups are also recognising the importance of good governance in the area of tax incentives in the global South,[2] and some are adopting a set of Responsible Tax Principles.[3] When working well, business tax contributions fund key programs crucial for gender equality and women’s rights, including education, health, and care services. In contrast, when businesses avoid tax, public services go under-funded and consumption taxes are often increased, both of which disproportionately burden women.
In light of the significant human rights risks posed by irresponsible corporate tax practice, how can the UN business and human rights framework be leveraged to ensure responsible corporate tax policy and practice? “There is a need,” according to the UN Working Group on Business and Human Rights, “to better delineate roles, responsibilities and appropriate accountability systems for both States and business enterprises with regard to specific issues, such as … tax avoidance.”[4] The State duty to protect human rights in its corporate tax policies, the business responsibility to respect human rights and carry out due diligence in their tax practices, and the need for effective remedy for tax abuse are all relevant, yet still emerging dimensions of the UN Guiding Principles on Business and Human Rights.
[1] KPMG, 2017. ‘Responsible Tax and the Developing World: Is tax a fundamental human right?' at https://responsibletax.kpmg.com/page/responsible-tax-and-the-developing-world-is-tax-a-fundamental-human-right-
[2] ActionAid, CBI, Christian Aid and Oxfam, 2018. ‘Tax Incentives in the Global South: a business and civil society brief’ at https://www.christianaid.org.uk/resources/about-us/tax-incentives-global-south-business-and-civil-society-brief
[3] The B-Team, “A New Bar for Responsible Tax: The B Team Responsible Tax Principles”
[4] A/HRC/29/28; See also John Ruggie, 2017: “Neither the income inequality nor the base erosion and profit shifting associated with the current structure of corporate globalization are socially sustainable” at https://www.ihrb.org/other/supply-chains/making-economic-globalisation-work-for-all-speech-by-prof.-john-ruggie
