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Offshore tax havens are costing governments more than $427 billion a year, including more than $89 billion in the US, according to a study published Friday.
“Globally, the equivalent of over 34 million nurses’ annual salaries is lost to tax havens each year,” the study, from UK-based advocacy group Tax Justice Network, said.
About $245 billion of the total was attributed to companies relocating profits to more tax-favorable countries. Wealthy individuals avoided the balance, $182 billion, by “hiding undeclared assets and incomes offshore, beyond the reach of the law,” the study said.
Corporations and the wealthiest are “cheating us all,” US Congresswoman Pramila Jayapal said in a tweet.
Regulate global taxation. Corporations & wealthiest are cheating us all. They have shifted trillions worth of profit each year into tax havens, which means $427 billion less annually in revenues that could pay for health, education & so much more. https://t.co/oRnk6Eks4n
— Rep. Pramila Jayapal (@RepJayapal) November 20, 2020
European parliament member Pedro Marques, of Portugal, said the statistics illustrated a “dire need” for international tax reform.
Today’s report by Tax Justice Network shows that we are in dire need of an international tax reform. In order to curb profit shifting and tax schemes, the OECD negotiations must deliver a bold agreement by mid-2021. @PSnaEuropa @TheProgressives @PES_PSE @paultang https://t.co/0voM2TxGKC
— Pedro Marques (@PedroMarquesMEP) November 20, 2020
The study’s publication was timed to coincide with world leaders’ arrival in Saudi Arabia for the G20 summit. The authors urged those leaders, whose countries account for a combined $290 billion in avoidance each year, to take action to stop tax cheats.
The leaders should require country-by-country asset and profit reporting, “so that corporate tax abusers and the jurisdictions that facilitate them can be identified and held to account,” read a blog post by Mark Bou Mansour, Tax Justice Network’s communications coordinator.
The Cayman Islands were tagged as the biggest contributor to tax avoidance, responsible for about $70 billion per year. But they are just part of a “spider’s web” of UK territories and dependencies responsible for a total of 37.4% of global tax cheats, the study found.
The five biggest tax losers were the US, UK, Germany, France, and Brazil, the report said. About $89.4 billion in US taxes were being avoided a year, along with $39.6 billion in the UK.
Some of the world’s largest companies have tangled with regulators over taxes in recent years. The European Union, for example, ordered US-based Apple in 2016 to pay $15 billion in back taxes, alleging illegal state aid in Ireland, although Apple won an appeal.
The report placed the blame for missing taxes squarely on government officials. The companies abusing tax systems aren’t avoiding taxes because they’re innovative, but because “they know politicians will let them get away with it,” said Rosa Pavanelli, general secretary of Public Services International, an international workers union.
Tax officials around the world have prioritized the “desires of the wealthiest corporations and individuals” over …read more
Source:: Businessinsider – Finance