'Only the Little People Pay Taxes' : Tax Evasion and Switzerland's Extraterritorial Obligations To Economic, Social and Cultural Rights in Zambia

Every year, approximately $3 trillion of government revenue is lost to tax evasion around the world. Individuals and business enterprises who evade taxes create an endemic drain on the availability of revenues for the progressive realization of economic and social rights, especially in countries with already high levels of inequality and low levels of tax. Further, tax evasion corrodes the responsiveness, answerability and representative nature and capacity of government institutions, undermining human rights accountability in innumerable ways. This paper presents a hypothetical inter-state complaint brought before the UN Committee on Economic, Social and Cultural Rights by the Republic of Zambia against Switzerland — one of the world’s leading tax havens — for actively promoting cross-border tax evasion. Tax evaders and those States complicit in tax evasion, it is argued, undermine governments’ ability to finance expenditures and conduct non-discriminatory and equitable fiscal policy in accordance with their Covenant obligations. By eroding the State’s capacity to exercise its sovereignty in taxing legal and natural persons in its jurisdiction, tax evaders and the countries which allow them to conceal their assets also destabilize the transparency, participation and accountability of public institutions. Switzerland’s encouragement and active protection of tax evaders by guaranteeing bank secrecy and tax havens on its territory, the case maintains, undermines Zambia’s ability to mobilize the maximum available resources for the progressive realization of the rights as well as protect against third-party infringements on rights under the Covenant. The Committee by extension finds that Swiss conduct in support of tax havens stands in contravention to its solemn duties to international cooperation and assistance in the universal fulfillment of the substantive rights to adequate standard of living, social security, health, and education of all Zambians