Tax evasion could be human rights abuse
Financial systems that enable tax evasion could be in violation of international human rights, a task force believes.
Illegal tax flows out of the developing world often facilitate poverty — and countries that ignore the practice should be held accountable by international law, according to the International Bar Association's Human Rights Institute Task Force.
However, at present, the line between illegal tax evasion and legal tax avoidance is often blurred and the onus for enforcing penalties falls on domestic bodies, despite the international implications, the taskforce said.
The cooperative said sophisticated tax strategies that promote evasion foster further inequality in developing nations. However, by cracking down on these strategies, nations could reduce the amount of foreign aid spent annually, it said.
The task force said specific practices that needed to be targeted included the use of offshore accounts, negotiation of tax incentives and holidays and cross-border intra-group transactions.
The human rights lawyers said international transparency standards needed to be applied, while lawyers had to balance their clients' needs with their duty to abide by international law.
"The international community has not only a legal obligation but also a moral duty to ensure that states use the maximum resources available to fulfil the civil, political, economic and social rights of citizens," said Thomas Pogge, Leitner Professor of Philosophy and International Affairs at Yale University, USA and Task Force Chair.
"The fact that sophisticated tax planning strategies are technically legal is no longer a justification for their use."
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
