Tax incentives and tax holidays As countries compete for foreign investment, they increasingly grant tax incentives to corporations to attract or retain investment.246 Special procedures have expressed concern about these tax incentives as they can involve customs duty and tax exemptions that incentivise direct private sector investment.247 Tax incentives to attract investment have global ramifications; they create a competitive ‘race to the bottom’.248 The Special Rapporteur on extreme poverty noted that such incentives warrant a heightened level of scrutiny in human rights terms because they reduce state revenues and therefore the resources states can devote to rights realisation. Furthermore, evidence that incentives actually attract investment is weak.249 As such, the CESCR recommends states carefully review their allowable tax exemptions.250 The Special Rapporteur on extreme poverty has further stated that ‘[W]here a State is alleged to be failing to use its maximum available resources to fulfil obligations to progressively realise economic, social and cultural rights, incentives would have to be justified by a clear description of deliberate, concrete and targeted advances towards the fulfilment of human rights that can be expected from their implementation.’251 States Parties would also bear ‘the burden of proving periodically that the granting of corporate tax breaks was the least restrictive policy option from the perspective of economic, social and cultural rights’.252 3.5 Concluding observations Traditionally, human rights monitoring bodies have lent greater attention to resource mobilisation via international assistance and cooperation (examined in Chapter 2, above), paying little attention to efforts to mobilise resources from other sources. For example, treaty bodies’ reporting guidelines call for states to supply at times quite detailed information on development cooperation and human rights assistance, including the extent to which states benefit from or provide such cooperation or assistance.253 That said, they do not request any other information on resource mobilisation. 246 See Michael Keen and Mario Mansour, Revenue Mobilisation in Sub-Saharan Africa: Challenges from Globalisation, IMF Working Paper (2009); UNCTAD, Least Developed Countries Report 2013. 247 See, eg, ‘Report of the Special Rapporteur on Cambodia, Surya P Subedi’ (2012) UN Doc A/HRC/21/63/Add.1, paras 33, 43 and 48; ‘Report of the Independent Expert on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, para 64. 248 See, eg, ‘Interim report of the Special Rapporteur on health, Anand Grover’ (2012) UN Doc A/67/302, para 19; ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28. 249 ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, para 65. 250 See, eg, Concluding Observations Burundi E/C.12/BDI/CO/1 (2015). Treaty bodies do acknowledge that some tax deductions and privileges can contribute to the human rights realisation. See CESCR recommendations that Uganda and Russia reintroduce tax benefits as incentives for hiring persons with disabilities: Concluding Observations Uganda E/C.12/UGA/CO/1 (2015) and Concluding Observations Russia E/C.12/RUS/CO/5 (2011). 251 ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, para 67. 252 ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, para 67. 253 UN, ‘Compilation of guidelines on the form and context of reports to be submitted by States Parties to the international human rights treaties’ (2009) HRI/GEN/2/Rev.6, para 43; CRC, ‘General guidelines regarding the form and content of initial reports to be submitted by States Parties under article 44, paragraph 1 (a) of the convention’ (1991) UN Doc CRC/C/5 (CRC Reporting Guidelines), para 19. 64 The Obligation to Mobilise Resources: Bridging Human Rights, Sustainable Development Goals, and Economic and Fiscal Policies   December 2017

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