The Netherlands tax policies and human rights overseas
Tax abuse deprives citizens of their economic and social rights. The Netherlands are an enabler of tax abuse and has been requested by the UNCRC (para 9c) to
“Conduct independent and participatory impact assessments of its tax and financial policies to ensure that they do not contribute to tax abuse by national companies operating outside the State party that leads to a negative impact on the availability of resources for the realization of children’s rights in the countries in which the companies are operating”
Significance of the Study
Enabling tax abuse deprives governments of revenue which could be used to provide public services. This study quantified the impact of Dutch tax policies on the fundamental rights of people and children living overseas.
Research objectives
To analyse the economic and social rights deficits stemming from the depletion of government budgets due to tax abuse attributed to the Netherlands.
Methodology: Research approach
Data on tax abuse
We use the State of Tax Justice 2023 (SOTJ2023) report which expresses tax abuse (both evasion and avoidance) from countries as a percentage of GDP. We convert 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). The GRADE models the effect on several Sustainable Development Goal (SDG) indicators, if governments have additional revenue equivalent to the losses from tax abuse.
The model assumes that governments will have additional revenue equivalent to that lost from tax abuse and that 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 The Netherlands 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 and data for fundamental rights for 88-169 countries, depending on the indicator (see countries with data in Table 1).
The Netherlands’ contribution to global tax abuse was 12.27 %. The human rights deprivations attributable to The Netherlands in proportion to their share of total global tax loss inflicted are shown in Table 1.
Table 1: Global human rights deprivations due to tax abuse and The Netherlands contribution| Basic water daily | Safe water daily | Basic sanitation daily | Safe sanitation daily | Children's deaths (per year) | Maternal Survival | Children 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 |
| Netherlands contribution | 1,729,919 | 283,786 | 3,389,833 | 639,960 | 3,753 | 425 | 367,381 |
Recommendations
This analysis indicates that the Netherlands is infringing on rights overseas and neglecting to adopt practices that promote other countries’ social and economic advancement.
The Netherlands needs to follow the recommendations set out by the UNCRC