Tax evasion causes states to lose $ 427 billion a year

Tax evasion around the world, whether by businesses or individuals, is costing governments dearly. About $ 427 billion a year, to be more exact. This is what reveals a report by the NGO Tax Justice Network, published Friday, November 20. The NGO has scrutinized tax evasion country by country in a report that it presents as the first of its kind and which attempts to shed light on financial flows known for their opacity.

The figures, released as the world fights against the pandemic, were compiled from the declarations of multinationals to tax authorities, recently published by the OECD and which date from 2016. For individuals, the NGO relied on bank deposit data available from the Bank for International Settlements (BIS) from 2018. The NGO considers tax evasion any financial flow abroad in order to avoid taxation, without entering into the debate on knowing whether it is illegal or not.

The salary of 34 million nurses

Of this sum of $ 427 billion that escapes tax, the equivalent of the annual salary of 34 million nurses, 245 billion are the work of companies and 182 billion individuals. The report explains that multinationals move the equivalent of 1.380 billion dollars in profits to tax havens, but also to several rich countries which do not always belong to blacklists like the one established by the EU.

Read also The French established in Switzerland will no longer escape the French tax authorities

Individuals invest a total of more than 10,000 billion in financial assets. The regions that lose the most are the richest. North America loses 95 billion dollars and Europe 184 billion, or, by comparison in the midst of a pandemic, 5.7% and 12.6% respectively of their budget dedicated to health. Latin America and Africa lose less money, but the impact is much heavier, since this represents 20.4% and 52.5% of their health budget respectively.

The Cayman Islands, big winners

The report also examines the countries that benefit the most from this tax evasion. The Cayman Islands, overseas territories of the United Kingdom, are the big winner, capturing 16.5%, ahead of the United Kingdom (10%), the Netherlands (8.5%), Luxembourg (6, 5%) and the United States (5.53%). “Under pressure from large corporations and tax havens like the Netherlands or the United Kingdom and its network, our governments have put the desires of wealthy companies and individuals before the needs of everyone else,” said Alex Cobham, director General of Tax Justice Network, quoted in a press release.

This report, released on the eve of the virtual G20 summit hosted by Saudi Arabia, urges world leaders to allow the publication of country-by-country tax data for multinationals, while OECD figures are only released. aggregates. Finally, the NGO pleads for more taxing companies and wealthy individuals in order to reduce the inequalities caused by the pandemic.

Read also Tax havens: the Netherlands no longer want this label

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.