NGOs are increasingly reporting on companies that avoid paying a fair share of taxes and royalties in developing countries. This deprives governments of essential revenues that they need, in order to deliver on development, health, education, housing, access to water and other human rights. UK-based Co-operative Bank states: “One of the most effective ways that businesses can contribute to poverty reduction is to pay income tax in developing countries.”
This section covers illegal tax evasion. It also covers instances of tax avoidance -- such as non-payment of taxes through agreements with governments, subsidies, loopholes, tax havens, creative accounting practices, transfer-pricing, etc. -- which may be legal under national law, but where concerns are raised about whether the tax avoidance harms the government’s ability to meet its human rights obligations, especially economic and social rights. And it covers a closely-related problem: many companies fail to disclose the tax and royalties they pay in each country.
Action is needed by governments, individually and collectively, to address these issues through improved laws and enforcement. But companies are responsible for their own tax practices, and that is the focus of this section.
Our “Tax avoidance” section includes links to reports by leading international and national NGOs. It includes allegations of misconduct by particular companies - and the ways in which companies are responding (or not responding) to them. It includes positive steps by business, statements by companies on the subject, and guidance materials. This section of our website was launched in October 2009 at a side-session at the United Nations in Geneva. The side-session included the participation of representatives of University of New South Wales, Caritas Zambia, Global Witness, and Business & Human Rights Resource Centre. All the presentations are available here.