This blog was written by Dr. Maria Ron Balsera, TaxEd Alliance Coordinator

On the eve of the international Human Rights Day, this blog highlights the necessity for adequate financing to ensure that human rights can become a reality for everyone. Education is a fundamental human right for everyone. Yet this right is still not a reality for millions and is violated every single day. Human Rights Day offers a good opportunity to discuss the right to education which is an enabling right for the achievement of all other rights.

Human rights are universal, inalienable, interdependent and indivisible. States have a responsibility to respect, protect and fulfil them, but due to differences in quantity and quality of resources and capacity, human rights law differentiates between immediate and progressive obligations towards ensuring their fulfilment. The core principle of non-discrimination is an immediate uncompromising obligation. Some other aspects of human rights have a progressive nature to accommodate the differences in terms of resources and population among states (for instance, in the right to education, tertiary education should be progressively free).

Yet it is important to highlight that progressive realisation of certain aspects of the right to education and other rights cannot be used as an excuse for lack of action or progress. States are obliged to take steps towards the full realisation of human rights and for that they must use their maximum available resources. These resources are not only economic, but also legal, administrative, technical, educational, amongst others. Equally, this obligation goes beyond the resources currently at governments’ disposal (including resources that could potentially be mobilised both by the state itself, but also through international cooperation and development). As such, maximum available resources do not refer solely to those in the national budget or currently available, but it requires that states mobilise enough resources by increasing domestic revenues. It includes extra-territorial obligations related to development cooperation to ensure the full realisation of rights. Mobilising these resources must comply with human rights, which is why increasing tax revenue through progressive taxation reform is a good way to increase revenue, redistribute wealth, reduce inequality, and fund education in a fair and sustainable way.

Domestic resource mobilisation, with progressive taxation at its centre, is key to sustainable and democratic financing for education and other rights, and the best solution to tap the gap for of the estimated trillions of dollars needed to achieve the SDGs. Tax Justice refers to both fair domestic and international resource mobilisation, such as progressive taxation, where those with a higher income pay more (personal and corporate income tax, based on graduated scales where the tax rate goes up as income level rises, are examples of progressivity). Regressive taxation would mean the poor pay a greater proportion of their available resources than the rich (consumption taxes which employ a flat rate, such as the Value Added Tax, are the clearest example). Taxes can be made more progressive with well-designed scales, exemptions and thresholds (on who earns or has enough to pay a particular tax).

However, the estimated figure of tax revenue lost each year to global tax abuse is US$483 billion. The amount lost to tax evasion (illegal) and tax avoidance (legal, but morally wrong, done through exploiting tax loopholes) amount to a minimum of US$100 billion annual (with some studies pointing at US$200 billion per year). Misinvoicing, a common practice that consists in deliberately misreporting the value of a commercial transaction to customs, seems to be leading to an annual loss of US$800 billion for developing countries alone. It seems clear that states are not doing enough to control illicit financial flows and, consequently, states are not able to use their maximum available resources.

Crises, such as environmental disasters or armed conflicts, can affect states’ capacities to meet their obligations towards the right to education and other human rights. In cases of retrogression in terms of providing the necessary resources to fulfil a state’s human rights obligation, the state has to demonstrate that this failure is the consequence of a real inadequacy of resources, rather than lack of political will to mobilise internal and external, economic and non-economic resources. Furthermore, even in the cases of demonstrated inadequacy of resources, the failure or backward steps must be temporary, proportionated and adequately monitored, and must ensure that the core obligations of non-discrimination, accountability, transparency and participation are respected. This mean that these backward steps cannot be justified by a political ideology that prioritises economic growth and fiscal consolidation, resulting in austerity and insufficient resources for public services that contribute to the realisation of human rights.

Against the backdrop of the ongoing effects of the pandemic, the war in Ukraine, and economic recession, many governments are adopting ‘fiscal consolidation’ strategies, also know as austerity and public sector wage bill constraints, often advised by the International Financial Institutions. Debt repayments is prioritised over education. In 2020, funding allocated to external public debt service was larger than education expenditure in at least 36 countries. This ideology puts the economy before people, economic growth before human rights, forgetting that the economy should work for the people and not the other way around, forgetting that the ‘trickle down’ economics has furthered inequalities and led to human rights violations; while investing in education and strong public services has led to sustainable economic growth.

Every year, the world celebrates World Human Rights Day on 10th December. The slogan for this year will be: Dignity, Freedom and Justice for All. Therefore, I would like us all to reflect on:

  • The effect of global tax abuse (illicit financial flows, tax avoidance, tax evasion and tax holidays) on the state’s ability to meet their human rights obligations
  • The effect of austerity, fiscal consolidation, prioritising debt repayment services while reducing public sector wage bills, in the enjoyment of human rights, and whether these retrogressions are necessary, proportionated and meet the core human rights obligations
  • The potential of tax justice to raise revenue in a fair and sustainable way, to redistribute wealth, curbing vertical and horizontal inequalities, to limit the consumption of products that cause damage to human health or environmental degradation, and to increase representation, strengthening the social contract, enabling states to increase their availability of resources to adequately respect, protect and fulfil human rights.