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Human rights and Irish tax policy.

By Sorley McCaughey.

Tax policy poses options to prioritise one sector of society over another. As with all choices, there are inevitably winners and losers. Professor Philip Alston, UN special rapporteur on extreme poverty and human rights, has firmly linked tax policy with human rights. He has posed this challenge squarely in the Irish context.

Last month the Central Statistics Office released data showing 135,000 children are living in material deprivation.  Citing these figures, Alston argued that this and other pockets of deep poverty across Ireland are the direct consequence of conscious decisions made by key actors who have chosen to prioritise other goals. He was speaking at a Christian Aid conference on the subject of the human-rights impact of tax and fiscal policy.

Christian Aid’s experiences in countries of the global south tell a similar story. Resource-rich but capital-poor Governments offer lucrative tax incentives to companies to locate in their country. This is because they are forced to compete to attract foreign direct investment into their country. Each incentive comes at a cost as money is diverted away from essential social services. In Sierra Leone, for example, the cost of tax incentives in 2011 was eight times that of the health budget. This is happening in a country where half the population lives below the bread line.

Invariably whether in Ireland or the global south it is the poorest and the marginalised who experience the worst impacts of such tax policies.

Both Alston and his predecessor as special rapporteur, Magdalena Sepulveda, have questioned Ireland’s commitment to these economic and social rights. Alston observed  growing reluctance in Ireland to accept that there are minimum human rights of access to housing, health and food. Sepulveda’s 2011 report highlighted that, as signatories to the UN Covenant on Economic, Social and Cultural Rights (UNCESCR), the Irish state has an obligation to ensure that citizens’ rights are protected even during times of economic hardship.

She wrote, “States must devote the maximum available resources to ensure progressive realisation of all economic, social and cultural rights by its population, as expeditiously and effectively as possible”.

The tension appears to lie mainly in ideological differences. Cuts to carers allowances for example were deemed a necessary evil by the Government – cuts that should be borne bravely, but that would be temporary in nature and would be readjusted when the books were balanced. A human rights-based approach to tax and fiscal policy could not pursue that course of action, even in times of great economic challenges. Rights are not dispensable, to be traded away during challenging times.

Budgeting from a rights perspective obliges a state to prioritise differently, to put the rights of citizens first and to allocate resources accordingly. This is not simply rhetoric. As signatories to the UNCESCR, the Irish we are duty bound as a state to ensure that this happens. Sepulveda linked this to tax policy.

She expressed concern “about the low level of taxation in Ireland, lower than most other European countries. Low levels of domestic taxation revenue can be a major obstacle to a State’s ability to meet obligations to realise economic, social and cultural rights”.

Last year the Department of Finance launched a public consultation paper on ‘Spillover Analysis – Possible Impacts of Irish tax System on Developing Economies’. This is an encouraging initiative, and suggests a willingness in the Department to be seen to be doing the right thing.

Irish tax and fiscal policy should be subject to periodic scrutiny to ensure they conform with the international human rights standards to which Ireland is a party.

Inevitably this will raise some difficult questions for the Government. However, until economic and social rights are recognised as inalienable and subject to the same protection as the more traditional civil and political rights, an uncomfortable gap will persist between what we say as a State and what we actually do as evidenced in our crucial tax and fiscal policies. •

Sorley McCaughey is Head of Advocacy and Policy with Christian Aid Ireland