The elephant in the room of business & human rights

The abusive tax practices of multinational corporations are driving pervasive and chronic human rights violations all over the world. The issue of corporate tax abuse has somehow remained largely absent from implementation of the United Nations Guiding Principles on Business and Human Rights (UNGPs), however. 

A new film and briefing – Corporate Tax Abuse: the elephant in the room of business and human rights – demonstrates how taxation must be addressed in the implementation of the UNGPs, both by governments and by private sector entities. Through case studies of Ireland and Kenya, both of which have been vocal champions of the Business and Human Rights agenda, the report and film examine how human rights norms and standards should be incorporated into the design and implementation of taxation policies, the negotiation of international taxation agreements and the tax planning strategies of business actors. 

The UNGPs represent the definitive, authoritative interpretation of how international human rights law pertains to the distinct but complementary responsibilities and obligations of both states and business entities.  

During the negotiations that went before their adoption, powerful corporate lobbies succeeded in removing any explicit mention of taxation from the Principles. In the years since, however, the issues of just taxation and financial transparency have risen up the human rights agenda, amidst growing recognition of the determinative impact taxation – at both domestic and international levels – has on the full spectrum of human rights outcomes. Recognition of the significance of crossborder tax abuse led the United Nations Working Group on Business and Human Rights to highlight taxation as a crucial concern in its 2021 stocktaking of the first 10 years of the UNGPs.  

Meanwhile, the State of Tax Justice 2024 demonstrates that countries lose US $492 billion to crossborder tax abuse each year. Of this sum, the largest share – some $347 billion – is lost to cross-border tax abuse by multinationals, while $145 billion is lost to offshore tax abuse by wealthy individuals. This torrent of lost revenue decimates governments’ capacity to provide quality public services and, in turn, the realisation of fundamental human rights. And although it is the industrialised economies of the Global North that lose most in absolute terms, the impact on human rights realisation is far greater in poorer nations where the losses incurred represent a much higher proportion of government spending.  

Indeed, crossborder tax abuse may be the most severe and pervasive driver of human rights violations linked to the activities of business entities. It is for this reason that governments seeking to properly implement the UNGPs, and hold businesses to account for their human rights responsibilities, must address taxation as a core element of this commitment.  

Both this film and briefing were produced with support of the European Union (Horizon Europe Framework). Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the granting authority. Neither the European Union nor the granting authority can be held responsible for them.