UK tax policies and human rights overseas
Tax abuse deprives citizens of their economic and social rights.
The United Kingdom of Great Britain and Northern Ireland and its dependents are responsible for 35% of global tax losses by countries around the world, and are indirectly responsible for the deprivation of human rights and the associated loss of life. This causes immense harm and has a disproportionately high impact on lower-income countries and upon the most marginalised in those countries.
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 the UK and dependents’ tax policies on the rights of people living in other countries.
Research objectives
To analyse the economic and social rights deprivations which result from government revenue losses due to tax abuse attributed to the UK and dependents.Â
Methodology: Research approach
Data on tax abuse
We use the State of Tax Justice 2023 report (SOTJ2023) 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). The GRADE models the effect of an increase in government revenue, equivalent to the estimates on tax abuse in individual countries for several Sustainable Development Goal (SDG) indicators.
The model assumes that government 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, it is projected over the years 2002-2020. The effect varies over time and here the year with the maximum impact is presented.
Study Results
The State of Tax Justice (SOTJ2023) 2023 reports that the UK and its dependents are responsible for 35% of global tax abuse.
The global human rights deprivations resulting from government revenue losses due to tax abuse in countries worldwide are analysed. The proportion of these deprivations attributable to the UK and dependents in proportion to their contribution to total global tax loss is presented.
Table 1 illustrates the human rights deprivations attributable to the UK and dependents in proportion to their contribution to total global tax loss.
Table 1: Global human rights deprivations due to tax abuse and UK 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 |
| UK contribution | 5,346,074 | 809,496 | 11,161,903 | 1,825,475 | 12,915 | 1,400 | 1,121,426 |
Recommendations
The United Kingdom of Great Britain and Northern Ireland and dependents must:
- Ensure that tax policies do not deprive other governments of revenue, thereby contributing to human rights deprivations in other countries.
- Support calls for inclusive and effective tax cooperation at the UN.