Are taxes and economic measures connected with the effectiveness of human rights?

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Dr María Paula Garat[1]
Brum Costa Abogados, Montevideo   


Taxes and economic measures are generally considered to be distant from human rights. Additionally, few connections on these topics are made regarding the association of taxes as limiting rights or the difficulties of human rights protection or effectiveness, especially with reference to economic and social rights, as caused by economic problems.

I observe another connection that seems to be more significant than those mentioned above: the association between an economic or tax measures and human rights compliance.[2]

The principal question this paper asks and intends to analyse is whether there is a connection between the economic and tax actions adopted due to Covid-19 and the protection and effectiveness of human rights, particularly on the compliance regarding the more-affected rights during this pandemic.

In order to answer this question, some examples of measures taken by different countries will be presented in the following section, to enable us to examine a possible association in greater depth. In these examples, actions taken under Uruguayan Law will primarily be studied. Finally, the analysis will end with a conclusion on the matter.

Is there really a connection? The Covid-19 pandemic and measures taken

The measures taken by various countries due to the Covid-19 pandemic are different and depend on the particular conditions of each country.[3] However, I will take as examples three special groups of action adopted in tax and economic areas.

First group: tax actions

This first example consists of instances where states have removed or reduced certain taxes or points of the applicable tax rate. This occurred, for instance, in China, where the value added tax (VAT) rate was reduced from three per cent to one per cent for certain and for a fixed period[4]. This also occurred in Germany, where there was a significant VAT reduction (from 19 per cent to 16 per cent for the general rate; and from seven per cent to five per cent for the reduced rate)[5].

Also included in this group are the actions that have extended tax deadlines or provided special financial programmes in order to repay tax duties, in part and throughout the year.

In Uruguay there was a reduction of a specific tax contribution applicable to a few cases, but there was also an extension of deadlines (which was more important for a particular category of taxpayers). In general, this was only for a few days each month. However, there have not been special actions yet with reference to repayment of tax debts.

Spain has also adopted an extension of tax deadlines, by Law Decree 7/2020, published on 13 March 2020 (Article 14).

Second group: financial help

Second, certain governments took action regarding subsidies or financing for special companies, in the more-affected sectors or for small to medium-sized businesses. This could be achieved through a more flexible loan (with minor requirements in terms of guarantees) or through a more convenient one, with special – and reduced — interest rates. This also took the form of a subsidy directly given by the state, in some cases.

In Uruguay, a special financial program under the National Agency for Economic Development was created, for small companies, giving special rates and increasing the amounts given to the National Guarantee System.

Third group: investment promotion

For the third group, I wish to add measures connected to investment and economic promotion. Uruguayan law introduced two particular actions:

  • Tax incentives for the construction sector, as an important area of the Uruguayan economy and as a sector that creates a lot of jobs. Decree 138/020 (29 April 2020) gave special tax exemptions on income tax, VAT and wealth tax to high-dimension construction projects that comply with certain requirements.
  • The relaxation of the concept of ‘tax resident’, introducing two more hypotheses for the definition of ‘economic interest’, a term that configures tax residence in Uruguay. By this policy, the economic interest will be configured — under Uruguayan law — if the person makes, from 1 July 2020, a real estate investment of approximately US$370,000 and also has 60 days of physical permanence in the country; or if the person makes, from 1 July 2020, an investment of approximately US$1.5m in a company that creates at least 15 new work positions (Decree 163/020, 11 June 2020).

In addition to these actions under the third group (investment promotion), other measures were taken, such as a special tax regime to certain particularly affected sectors (travel companies or agencies, hotels, tourism, among others). Some of these were adopted in Cambodia, the Dominican Republic and Peru, among others[6].

Consequently, the question we have to ask is: how are these actions are connected to human rights protection?

The protection of human rights should be considered to be the aim of these different actions and also part of the content of each of them. In this regard, the Organisation for Economic Cooperation and Development explains why gender perspective (and female inequality) should be considered in the tax responses to Covid-19.[7]

The Inter-American Court of Human Rights has interpreted Articles 1.1 and 2 of the American Convention of Human Rights (ACHR) in such a way that, for human rights protections, two types of obligation are required by states: a negative obligation, which relates to non-intervention; and a positive obligation, that demands an active measure of intervention or protection by the state.[8]

Could economic and tax measures, such in as the above examples, be conceived of as a positive action by the state in terms of human rights effectiveness (Articles 1.1 and 2, ACHR)?

In my opinion there is no doubt on this point. These actions should be conceived of as measures necessaryfor states to adopt. Governments must take these kinds of tax or economic actions with the aim of stopping or preventing the consequences of the pandemic and reducing economic and financial impact. But governments must also take these kinds of tax or economic action with the aims of minimising limitations to human rights and also of offering a major protection to the enforcement of these rights.


From the foregoing analysis it is concluded that, not only do economic and tax measures have a connection with human rights protections and their effectiveness, but also that this connection is necessary and that measures of these type — as shown in the examples presented — should be taken by states in order to stop a possible economic and financial crisis and to also achieve better compliance with different human rights.

The importance of this connection is essential. When we change our way of thinking by conceiving a tax or an economic measure as a human rights compliance action, we take into careful consideration both the aim of that action and its significance.

This is not only important for justifying and studying governmental positions and actions, but especially for evaluating compliance with human rights protections, which has a particular relevance such sudden situations as the Covid-19 pandemic.

Human rights should also be considered to be integral to the action and part of its content. The principle of equality in relation to taxes has a significant application, so this principle — as well as others rights — must be closely analysed. In this way, and in connection to more equal tax systems, the discussion that I foresee over the coming years is whether the law (and especially the income tax system) could be more personal, taking into account the particular situations of taxpayers, as well as more equal.

To conclude and to answer the original question, this connection is always present (and not only a concern in emergencies or pandemics). This association is also one of the particularities highlighted by Covid-19 and its relationship to the law.

[1] PhD, Seville University (Spain). Constitutional and Tax Law Professor, Catholic University of Uruguay. Senior Lawyer, Brum Costa Abogados (Uruguay). Contact:, Montevideo, Uruguay.

[2] I analysed a similar connection with reference to companies’ actions and human rights effectiveness in: Garat, María Paula, ‘The companies compliance: an instrument for the normative fulfillment and a guarantee for the fundamental rights’ (2018) Law Review of Mexican National University (UNAM) School of Law, 271. Available at:

[3] Some of these actions can be consulted in this study done by the Tax Foundation: Fiscal Measures during the Coronavirus Outbreak. Available at:

The OECD also published an excel table with all the tax measures adopted by countries (‘Database on tax policy measures in response to Covid-19’) that can be consulted on the OECD website:

[4] Lu Lewis, ‘China announces tax relief measures to tackle coronavirus disruption’ 27 February 2020:

[6]‘OECD Databaseon Tax Policy Measures in Response to Covid-19’. Available at:

[7] Harding, Michelle; Perez-Navarro, Grace and Simon, Hannah, ‘Tax, Gender Blind is not Gender Neutral: why tax policy responses to COVID-19 must consider women’, OECD. Available at:

[8] For instance: Cases Velásquez Rodríguez vs Honduras(1988)p. 165 and166; Suárez Peralta vs Ecuador (2015) p. 127; Poblete Vilches vs Chile (2018) p. 123 and 146. With special connection to the Covid-19 situation, please see this recent case decision case: Velez Loor vs Panamá (Provisional Measures, adoption of urgent measures), 26 May2020. Available at:

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