Naomi Fowler ■ Switzerland in the UN hot seat over impact of its tax policies on women’s rights
Switzerland—ranked number one in the Tax Justice Network’s Financial Secrecy Index —faced tough questions from a U.N. human rights body in Geneva this week over the toll that its tax and financial secrecy policies take on women’s rights across the globe. Prompted by a coalition of Swiss and international human rights and tax justice advocates, the UN Committee mandated to oversee compliance with the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) grilled Switzerland on how it will ensure that its financial secrecy policies and corporate tax rules are consistent with its commitments to promote gender equality and sustainable development abroad.
Every year governments lose huge volumes of revenue when corporations and wealthy individuals avoid paying their fair share of taxes by shifting their funds to countries like Switzerland where they can be held in secret, taxed at very low rates, or exempt from taxation altogether. These tax revenues are essential for the fulfillment of fundamental human rights. When government coffers are drained, the resultant cuts in public programs and social protections hit women hardest, as they often are forced to fill service gaps with their unpaid care work. Moreover, when wealthy individuals and corporations dodge their dues, women bear the brunt of States’ increased dependence on consumption taxes which disproportionately hit those with the least the hardest.
As party to CEDAW and signatory to the new UN Sustainable Development Goals, Switzerland has committed to avoiding policies that are detrimental to the rights of women, whether at home or beyond its borders. It is likewise obliged to prevent private sector conduct that might undermine women’s rights extraterritorially, by helping to prevent corporate tax abuse and enable other countries to raise and retain revenues needed to fulfil human rights. In its July report to the UN forum monitoring implementation of the Sustainable Development Goals, Switzerland claimed it is “committed to a coordinated international effort to eliminate the causes of illicit financial flows,” which include the very types of financial secrecy policies and lax corporate reporting standards that make this Alpine nation a top destination for those seeking to avoid ‘the taxman.’
Over a third of the world’s total unrecorded offshore financial wealth is estimated to be held in Switzerland, which ranks number one on the Financial Secrecy Index. Cross-border tax abuse deprives developing countries of an estimated 500 billion dollars in revenue each year—more than twice the total amount those States receive in official development assistance from industrialised countries. In countries such as India and Zambia, the revenue lost to Swiss-facilitated tax abuse represents a significant proportion of spending on women’s rights and essential social services such as health.
In a landmark submission to CEDAW and this accompanying Factsheet, Alliance Sud, the Berne Declaration, the Center for Economic and Social Rights, the Global Justice Clinic at NYU School of Law, and the Tax Justice Network, call on Switzerland to regularly report on the impacts of its financial secrecy policies and lax rules on corporate tax and disclosures on the mobilisation of revenues for women’s rights in other countries. These organisations urge Switzerland to incorporate key legal and policy safeguards – in particular a process of independent and periodic impact assessments – to ensure that Switzerland does not enable tax abuses that undermine the ability of other countries to mobilise the resources they need to fulfil women’s rights.
Spurred by this submission, the CEDAW Committee expressed concern that Switzerland’s financial secrecy and corporate tax policies are adversely affecting women’s rights and sustainable development overseas, and asked the government how it will harmonise these policies with its commitments under the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.
In its prepared response, Switzerland acknowleged the harm that tax abuse can have on sustainable development and gender equality, but stopped short of committing to assess and address the role its own policies play in facilitating this corrosive phenomenon.
Switzerland’s appearance on 2nd November 2016 before the UN’s top women’s rights body represents a critical milestone in the fight against the longstanding injustice of tax abuse. CEDAW’s engagement is yet another testament to the rapidly expanding efforts of the human rights regime hold governments accountable for the human impacts of their tax and financial policies.
CEDAW’s concluding observations and recommendations to Switzerland are expected later this month. We’ll let you know what those are as soon as we know.
For further reading and information please see the Tax Justice Network’s Gender and Tax Justice page.
For further media comment contact Liz Nelson +44 (0) 7887 740 798
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Taxation, illicit financial flows and human rights – Submission to UN Expert
29 June 2022