A fair tax system sits at the heart of global economic justice and human rights protection. Public debates and international negotiations increasingly show how taxation shapes inequality, government accountability, and access to basic services. From protests outside the US Capitol to diplomatic talks at the United Nations, tax justice has become a defining issue of modern governance.
Global Tax Rules And Historical Imbalance
International tax rules were designed over a century ago, during a colonial era that excluded much of today’s Global South from decision-making. Modern economies now operate across borders and digital platforms, yet outdated frameworks still govern how profits are taxed.
OECD-led systems, created without representation from African nations, continue to dominate global tax policy. This imbalance favors wealthier countries and multinational corporations while limiting developing nations’ ability to collect revenue where economic activity actually occurs.
Tax policy directly influences social stability. Rising inequality has fueled protests and political unrest across many regions. Kenyan demonstrations in 2024 highlighted public resistance to tax proposals targeting basic necessities such as menstrual products and mobile money transactions used by informal workers.
Economic frustration linked to unfair taxation often strengthens authoritarian tendencies and erodes trust in democratic institutions. Fair taxation, by contrast, supports social cohesion and long-term stability.
Cross-border tax rules allow corporations to exploit loopholes through practices like transfer pricing. Treating subsidiaries as separate entities enables profit shifting to low-tax jurisdictions, triggering a global race to the bottom on corporate tax rates.
Digital businesses worsen this challenge by earning significant revenue in countries where they pay little or no tax. Shell companies and offshore accounts further obscure accountability, making enforcement difficult.
Ultra-wealthy individuals benefit most from these systems. Oxfam reports show that global private wealth has grown eight times faster than public wealth since 1995. Billionaires effectively pay less than 0.5 percent in taxes on their wealth, while governments lose hundreds of billions in potential revenue each year.
Human Rights Consequences Of Weak Tax Systems
Revenue losses from tax avoidance limit governments’ ability to fund essential services. Education, healthcare, housing, and social protection all depend on stable public finances.
Sri Lanka offers a clear example. Tax revenue once accounted for over 20 percent of GDP but fell to just 7.3 percent by 2022. Reduced public investment contributed to a debt crisis that harmed millions of families and undermined basic social rights.
Weak tax systems often force governments to rely on regressive taxes, placing heavier burdens on lower-income populations while wealth remains largely untaxed. Negotiations for a UN-led international tax treaty represent a potential turning point. Countries from the Global South now have an equal voice in shaping global tax rules, aligning taxation with international human rights obligations.
Proposed provisions aim to allocate taxing rights based on where value is created, markets operate, and revenues are generated. Such reforms could rebalance power away from corporate headquarters toward countries where real economic activity occurs.
Calls from groups like ICRICT emphasize treating multinational corporations as single entities to reduce profit shifting. Cooperative enforcement, transparency measures, and actions against illicit financial flows also feature in ongoing discussions.
A fair global tax system supports more than revenue generation. Funds raised through equitable taxation can finance climate transition efforts, reduce poverty, and strengthen public institutions.
Negotiations continue, with draft frameworks expected for review at the UN General Assembly in 2027. Progress offers an opportunity to reshape global economic governance and reinforce governments’ capacity to protect social, economic, and cultural rights worldwide.
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