A/HRC/44/40/Add.2 the Government should immediately design fiscal measures to incentivize rental of the millions of apartments that remain vacant. 43. Finally, the Government must do far more to give substance to the right to housing, as Portugal has through its Basic Housing Law of 2019. Despite constitutional recognition, it is clear that for practical purposes the right to housing in Spain is largely irrelevant. While the right may not be justiciable in national courts without a constitutional amendment or new legislation, that does not excuse the blatant disregard for the obligations of the State. Housing laws, policies and strategies should be shaped by the fact that housing is, both constitutionally and as a matter of international law, a human right. C. Tax policy 44. If Spain is serious about fighting poverty and making much-needed investments in social assistance, education and housing policies, it also needs to change its tax policies. Current revenue is not enough to fulfil social rights and achieve a balanced budget, the system is inadequately progressive and tax fraud and avoidance potentially cost the country billions each year. 45. Tax revenue is relatively low: the tax-to-GDP ratio was 35.4 per cent in 2018, much lower than the European Union average of 40.3 per cent or the Eurozone average of 41.7, and especially low compared to peer countries like Italy (42.1 per cent) and France (48.5 per cent).66 46. Corporate tax rates have been cut since 2006 from 35 to 25 per cent 67 and firms take advantage of generous deductions and subsidies to pay far less than the nominal rate. The Government refuses to disclose how much individual corporations pay in taxes, citing companies’ right to confidentiality, and despite support for prudent reforms at the international level, it has not implemented robust corporate tax disclosure requirements domestically. According to Oxfam, the Government’s method of calculating effective corporate tax rates fails to take into account significant exemptions and other adjustments that occur prior to determining the tax base. That approach is problematic, given the public interest involved and the new Government’s pledge to bring the effective rate up to a minimum of 15 per cent. Corporate tax revenue has declined massively in recent years: between 2007 and 2018, corporate taxes fell from 22.34 to 11.9 per cent of total revenue (from 44.82 to 24.84 billion euros).68 Between 2007 and 2017, total tax revenue actually declined by about 6.7 billion euros.69 47. Aside from failing to raise needed revenue, the tax system is inadequately progressive and barely begins to harness the capacity of taxes to address inequality. Inequality skyrocketed after the crisis: between 2007 and 2015, the Gini index rose by 2.1 points, the S80/20 by 0.9 and the Palma ratio by 1.4, 70 yet the redistributive effect of household direct taxation is much lower than the European Union average, reducing the S80/S20 ratio by 8.6 per cent in 2016, compared to 12.4 per cent in the European Union. 71 Indirect taxes actually increased inequality by 3.5 per cent.72 48. Spain is increasingly reliant on value added tax (VAT), with a rate increase from 16 to 21 per cent between 2009 and 2013, raising its percentage of total revenue from 27.83 to 33.63 per cent.73 That is problematic because the tax is generally regressive and in Spain even more so, owing to a number of deductions that benefit wealthier people, such as for 66 67 68 69 70 71 72 73 Eurostat, “Tax-to-GDP ratio up to 40.3% in EU” (October 2019). European Commission, “Top statutory corporate income tax rates (including surcharges), 1995– 2019”. Information provided by the Ministry of Treasury on 4 February 2020. Ibid. OECD, “Income inequality” (accessed on 18 October 2019). European Commission, Country Report Spain 2019, p. 32. Ibid. Information provided by the Ministry of Treasury on 4 February 2020. 11