Tax evasion costs the world $ 427 billion annually

Tax evasion by companies and individuals annually costs countries $ 427 billion in favor of tax havens or countries that are not tax-hardening, as revealed Friday by the "Tax Justice Network" organization. Government.

The organization examined tax evasion operations in each country in a report it says is the first of its kind and tries to shed light on financial flows known to be ambiguous.

The figures published as the world is combating the Covid-19 epidemic, were compiled on the basis of the multinational companies' announcements of the tax authorities in the countries concerned, recently published by the Organization for Economic Cooperation and Development and dating back to 2016.

For individuals, the NGO has relied on bank deposit data available with the Bank for International Settlements since 2018.

The organization classifies any financial transfer abroad with the aim of avoiding taxes, as tax evasion, regardless of whether the move is legal or not.

The amount of 427 billion dollars is equal to the annual salary of 34 million nurses, and the bulk of it (245 billion dollars) is caused by corporate tax evasion, and the rest (182 billion dollars) is caused by individuals evading.

The report explains that multinational companies transfer the equivalent of $ 1,380 billion in profits to tax havens, but also to rich countries that are not on black lists such as those adopted by the European Union.

In turn, individuals transfer more than $ 10,000 billion in financial assets.

The areas that lose the most from this evasion are the rich regions.

North America and Europe lose $ 95 billion and Europe $ 184 billion, which is equivalent to, respectively, 5.7% and 12.6% of their health budgets, for example.

Latin America and Africa are losing less money, but tax evasion has a greater impact on the two regions, because the money they lose is equal to 20.4% and 52.5% of their health budgets, respectively, amid the outbreak of the Covid-19 epidemic.

The report also indicates the countries that benefit the most from tax evasion: the Cayman Islands, which is a British territory, the largest gainers with 16.5%, the United Kingdom (10%), the Netherlands (8.5%), Luxembourg (6.5%) and the United States (5, 53%).

"Under the pressure of major companies and tax havens such as the Netherlands and the United Kingdom and their network, our governments have expressed the desires of companies and wealthy individuals to the needs of everyone," Alex Cobam, Director General of the organization said in a statement.

The report, published on the eve of a virtual G20 summit organized by Saudi Arabia, urges international leaders to allow the publication of tax data for multinational companies in each country separately, while the OECD data is published in an integrated format.

The organization called for increasing taxes on companies and wealthy individuals in order to bridge the inequality created by the epidemic.

 

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