A/HRC/26/28 effectively being funded by the very persons whom they seek to benefit.59 Thus, although each country’s situation is different, the higher the prevalence of regressive taxes in the mix of revenue-raising sources, the more likely it is that a State will run afoul of the principles of equality and non-discrimination and that the minimum essential enjoyment of rights by the poorest will be threatened. 48. A well-placed tax threshold (namely, the income below which an individual or household is exempted from income tax) is also crucial for ensuring that the taxation system does not jeopardize the ability of people living in poverty to enjoy minimum essential levels of economic, social and cultural rights. Unfortunately, in some countries, households are required to pay tax before they earn enough to even meet minimum food basket requirements.60 49. Tax structures also affect other types of inequality; for instance, tax structures frequently discriminate against women directly or indirectly, for example by assuming women’s income to be supplemental to their household. 61 This actively disincentivizes wage-earning and therefore could reduce participation in the labour market by women, potentially threatening their right to work. Policymakers should be aware of the extent to which tax policies, such as the treatment of income derived from jointly-owned assets of married couples, strengthen or break down gender inequalities, or discriminate against different types of households.62 50. Each national and economic context is different; the optimum form and scale of redistribution is therefore different for each country. States do have, however, an obligation to address proactively inequality in the enjoyment of rights. Redistribution through tax systems is clearly a powerful tool for them to do so. C. Strengthening governance and accountability 51. Historically, the formation of accountable and effective States has been closely tied to the emergence of taxation systems. 63 Fiscal policies can spur State-building and foster citizenship, 64 affect the level and quality of people’s participation in public affairs and strengthen the accountability and capacity of the State.65 Conversely, tax abuse and unfair tax practices erode confidence in government, while States that do not have to rely on tax contributions (but rather on, for example, revenues from natural resources) tend to exhibit lower levels of accountability and participation in public affairs.66 52. In the same vein, the more a State can rely on domestic rather than external resource mobilization for its financing, the more it will be able to deploy sustainable development strategies and policies that are responsive to the needs of its people and accountable to them. Therefore, a sustainable base of domestic revenue becomes an enabling factor to 59 60 61 62 63 64 65 66 A/HRC/13/33/Add.6, para. 36. Tax Justice Network Africa and Christian Aid, “Africa Rising?” (see footnote 49), p. 7. See Diane Elson, Budgeting for Women’s Rights: Monitoring Government Budgets for Compliance with CEDAW, UNIFEM, May 2006, pp. 69-103; Caren Grown and Imraan Valodia, Taxation and Gender Equity, 2010. UNDP, Gender Equality and Poverty Reduction: Taxation (see footnote 57). Mick Moore, “How Does Taxation Affect the Quality of Governance?”, IDS Working Paper, 2007. European Commission, Tax and Development, COM(2010)163 final, 2010, p. 3. See OECD, Governance, Taxation and Accountability: Issues and Practices, 2008, p.13. African Development Bank, OECD et al, African Economic Outlook 2012, p. 56; Ernesto Crivelli and Sanjeev Gupta, “Resource Blessing, Revenue Curse? Domestic Revenue Effort in Resource Rich Countries”, IMF Working Paper, 2014. 13