A/HRC/31/33 5. The importance of effective and efficient taxation was illustrated by a study examining the connection between tax revenues and progress on the Millennium Development Goals. The authors of the study concluded that, where tax-to-GDP ratio is high, and tax revenues add to incremental progress in identified obligations, fewer children will be undernourished, more people will be able to read, the child mortality rate will be lower and fewer women will die in labour. 2 The importance of effective taxation was captured in the slogan of the Kenyan revenue authority: “Pay your taxes and set your country free”.3 6. The act of developing effective and equitable taxation systems can encourage dialogue between the State and citizens, and help to ensure better formal accountability. In the case of Ghana, developing a functioning tax administration has also motivated further development of institutions in other parts of the public sector, such as health and education.4 Similarly, in Nigeria, Lagos State was able to increase its tax revenue more than tenfold between 2003 and 2007 by improving revenue collection. This trend coincided with a visible expansion in social services and led to a change in public attitudes towards government and taxation.5 7. The willingness of citizens to pay tax is closely correlated with decreased corruption, and creates an incentive for Governments to govern more effectively if they want to collect more revenue. For example, over the past decade, the Government of Rwanda has expanded its fiscal space to increase investment in children not only by improving efficiency in tax collection but also by cracking down on corruption, reducing its reliance on the more regressive consumption taxes. These measures have contributed to increased social expenditures on health and social protection. 6 8. In order to ensure that all citizens and corporations comply fully with their obligations, States must work towards achieving transparency of taxation, strengthening the tax base, closing tax loopholes and promoting international cooperation to avoid tax evasion. Tax policies must be accompanied by the administrative and institutional capacity to collect taxes fairly and efficiently. States should also recognize the importance of taxation in tackling and redressing systemic discrimination by improving equity in revenue collection. For this reason, taxation should be progressive, and any taxes with a regressive effect must be avoided. Governments should also ensure that taxes on products and services do not harm children by increasing the price of essential goods, including food and medications, in such a way that it adversely affects the realization of children’s rights. IV. Child rights-based budgeting and spending 9. The budget reflects a Government’s agenda, and is the clearest expression of its priorities, performance, decisions and intentions. For that reason, budgets should be evaluated in their entirety for their impact on the realization of children’s rights. Budget analysis is a tool for both monitoring the State’s performance and holding it accountable. 2 3 4 5 6 Atiya Waris and Matti Kohonen,”Building taxation to achieve the Millennium Development Goals in Africa”, paper presented at the Workshop on Debt, Tax and Human Rights, Essex University, July 2011. David McNair et al, Tackling Tax and Saving Lives (London, Save the Children, 2014), pp. 4-6. Ibid., p. 6. Cristina Bodea and Adrienne LeBas, “The origins of social contracts: attitudes toward taxation in urban Nigeria”, Centre for the Study of African Economies, CSAE working paper, January 2013. Submission from Save the Children. 3