Irish tax policies and human rights overseas
Tax abuse deprives citizens of their economic and social rights. Ireland enables tax abuse and has been requested by the UNCRC (para 9c) to:
“Ensure that tax policies do not contribute to tax abuse by companies operating in other countries, leading to a negative impact on the availability of resources for the realization of children’s rights in those countries”
Significance of the Study
Enabling tax abuse deprives governments of revenue which could be used to provide public services study. This study quantified the impact of Irish tax policies on the fundamental rights of people and children living overseas.
Research objectives
To analyse the economic and social rights deprivations which result from losses from government budgets due to tax abuse attributed to Ireland.
Methodology: Research approach
Data on tax abuse
We used the State of Tax Justice 2023 (SOTJ2023) report which expresses tax abuse (both evasion and avoidance) from countries as a percentage of GDP. We converted this into a percentage of government revenue to translate these losses into economic and social human rights.
Translation
To ‘translate’ the impact of global tax abuse, we use the Government Revenue and Development Estimations (GRADE). GRADE models the impact of an increase in government revenue, which is equivalent to the estimates of tax abuse in individual countries for several Sustainable Development Goal (SDG) indicators.
The model assumes that governments will have additional revenue equivalent to that lost from tax abuse and their budget allocation across sectors will remain the same. Therefore, the translations are realistic and tailored to individual countries and set apart from analyses that equate a change in government revenue with an impact on just one sector or SDG indicator.
To reflect the long-run impact of the additional government revenue on governance, the additional revenue which governments would have, as a percentage of their total revenue, in the absence of tax abuse is projected over the years 2002-2020, but the impact for only one year, the final year (2020) is presented.
Study Results
We present global human rights deprivations due to government revenue losses from tax abuse in all countries, and the share of these deprivations attributable to Ireland in proportion to their share of the total global tax loss inflicted. Data on tax abuse as a percentage of government revenue are available for 187 countries.
Ireland’s contribution to global tax abuse was 4.08%[1]. The human rights deprivations attributable to Ireland in proportion to their share of total global tax loss inflicted are shown in Table 1.
Ireland deprives more than one million people of their right to basic sanitation and more than half a million of their right to basic water every day. Every day, three children die. See Table 1.
Table 1: Global human rights deprivations due to tax abuse and Ireland's contribution| Basic water daily | Safe water daily | Basic sanitation daily | Safe sanitation daily | Children's deaths (per year) | Maternal deaths | Children not in school | |
|---|---|---|---|---|---|---|---|
| Global human rights deprivations due to tax abuse | 14,098,771 | 2,312,845 | 27,627,003 | 5,215,647 | 30,590 | 3,466 | 2,994,138 |
| Countries with data | 168 | 100 | 167 | 88 | 169 | 168 | 163 |
| Irelands contribution | 575,230 | 94,364 | 1,127,182 | 212,798 | 1,248 | 141 | 122,161 |
[1] This figure includes harm due to tax losses due to offshore wealth (Ireland contributes 5.12% to the global total) and harm due to corporate tax loss (Ireland contributes 3.52% of the worldwide total) see SOTJ2023
Recommendations
This analysis indicates that Ireland is infringing on rights overseas and neglecting to adopt practices that promote other countries’ social and economic advancement.
Ireland needs to follow the recommendations set out by the UNCRC.
For a deeper dive, view Irish tax policies and human rights deprivation overseas (pdf).