4.2 Fiscal abuses: evasion, avoidance and other illegal practices Fiscal abuses are part of the broader problem of illicit financial flows. The term ‘fiscal abuses’ gives rise to several definitional problems. Does it include tax evasion, tax avoidance or conduct in the grey areas between evasion and avoidance, such as aggressive tax planning?262 Special procedures and treaty bodies have yet to define or use the term consistently. As noted by the Special Rapporteur on extreme poverty, ‘tax abuse is not a victimless practice; it limits resources that could be spent on reducing poverty and realising human rights, and perpetuates vast income inequality… a State that does not take strong measures to tackle tax abuse cannot be said to be devoting the maximum available resources to the realisation of economic, social and cultural rights. Moreover, high levels of tax abuse undermine the principles of equality and non-discrimination.’263 From the point of view of resource mobilisation, human rights monitoring bodies have stressed that tax abuses limit public revenue that could be spent on human rights in rich and poor countries alike. If states do not tackle tax abuses, these are likely to disproportionately benefit wealthy individuals to the detriment of the most disadvantaged. Thus, they call on states to intensify efforts to combat tax avoidance and evasion.264 ‘Actions or omissions that diminish public revenues by allowing large-scale tax evasion… could constitute violations of human rights obligations, such as the obligation to allocate the maximum available resources to the enjoyment of economic, social and cultural rights or to eliminate discrimination.’265 The CESCR has raised this point in the context of resource mobilisation. It has, for instance, recommended that Kenya take measures ‘to combat illicit financial flows and tax avoidance with a view to raising national revenues’266 and that the UK ‘take strict measures to tackle tax abuse, in particular by corporations and high-net-worth individuals’.267 4.3 Corruption UN treaty bodies have indicated that corruption entails a failure by states to comply with their obligation to use the maximum available resources.268 It was pointed out that corruption resulted 262 The 2013 IBAHRI report defines tax abuses as tax practices that are contrary to domestic and international tax laws and policies, such as tax evasion, tax fraud and other illegal practices – including tax losses resulting from other illicit financial flows such as bribery, corruption and money laundering. See Tax Abuses, Poverty and Human Rights (IBAHRI 2013), p 24. 263 ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, paras 59–60. 264 See, eg, ‘Report of the Independent Expert on foreign debt, Cephas Lumina’ (Mission to Greece) (2014) A/HRC/25/50 Add.1, para 92. 265 ‘Report of the Special Rapporteur on poverty, Magdalena Sepúlveda Carmona’ (2014) UN Doc A/HRC/26/28, para 5, citing CESCR, General Comment No 20 (2009) on non-discrimination in economic, social and cultural rights (2009) UN Doc E/C.12/GC.20. 266 CESCR, Concluding Observations Kenya E/C.12/KEN/CO/2-5 (2016). The CESCR has also called on Burkina Faso to redouble its efforts to combat illicit financial flows E/C.12/BFA/CO/1 (2016). 267 CESCR, Concluding Observations UK E/C.12/GBR/CO/6, paras 16–17. 268 See, eg, CRC, General Comment No 19 (2016) UN Doc CRC/C/GC/19, para 34. See also, CESCR, Concluding Observations Moldova (2003) UN Doc E/2004/22; CRC, Concluding Observations Togo (2012) UN Doc CRC/C/ TGO/CO/3-4; CESCR, Concluding Observations Romania (2014) UN Doc E/C.12/ROU/CO/3-5, paras 7–8. 68 The Obligation to Mobilise Resources: Bridging Human Rights, Sustainable Development Goals, and Economic and Fiscal Policies   December 2017