Global tax evasion costs $427bn per year

Pedro Gonçalves
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Global tax evasion costs $427bn per year

Taxpayers around the world lose at least $427bn each year to individual tax evasion and multinational corporate profit-shifting, according to analysis from campaigning group the Tax Justice Network.

The TJN said in a statement that it has sifted through records worldwide in the first global study of its kind - and urged global action over shadowy tax havens that have diverted billions of dollars from nations currently fighting the covid-19 pandemic.

Higher income countries altogether lose over $382bn every year whereas lower income countries lose $45bn.

A global tax system that loses over $427bn a year is not a broken system, it’s a system programmed to fail

"A global tax system that loses over $427bn a year is not a broken system, it's a system programmed to fail," said Alex Cobham, chief executive of the Tax Justice Network, in a statement.

"Under pressure from corporate giants and tax haven powers like the Netherlands and the U.K.'s network, our governments have programmed the global tax system to prioritise the desires of the wealthiest corporations and individuals over the needs of everybody else. The pandemic has exposed the grave cost of turning tax policy into a tool for indulging tax abusers instead of for protecting people's wellbeing."

The TJN also estimated that the total tax-evasion sum comprised $245bn committed by businesses - and $182bn committed by individuals.

Multinational corporations are shifting about $1.38trn of profits via tax havens, while private individuals are investing more than $10trn in assets there, according to the study.

The world's richest regions including Europe and North America take the biggest financial hit from evasion.

The report urges leaders in the US and other parts of the world to advance reforms to close tax avoidance strategies in order to replenish public treasuries and increase the resources available to combat the covid-19 crisis.

 

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