Countries are losing a total of $483 billion in tax a year to global tax abuse committed by multinational corporations and wealthy individuals according to the 2021 edition of the State of Tax Justice report.
“This figure is a staggering amount of money lost to Governments as they struggle to provide quality public services and address complex challenges facing their people, such as the Covid 19 pandemic and climate change,” said Glenn Barclay, Chair of Tax Justice Aotearoa. “This would be enough to fully vaccinate the global population against Covid-19 more than three times over, at a time when many countries are struggling to vaccinate their own populations.”
“Covid has also seen multi-national corporations boost their profits as they take unfair advantage of the restrictions placed on local companies during lockdowns, but they are not contributing their fair share of tax,” said Glenn Barclay. “The global Tax Justice Network is calling for governments to introduce an excess profit tax on these corporations, as well as wealth taxes on the wealthiest individuals to fund the pandemic recovery. Tax Justice Aotearoa supports these calls and believes that the New Zealand government should consider similar measures in this country.”
While the numbers are huge the real amount is likely to be much higher as the $483 billion loss consists of only direct tax losses: that is, tax losses that can be observed from analysing data self-reported by multinational corporations and from banking data collected by governments. The IMF estimates that indirect losses from global tax abuse by multinational corporations are at least three times larger than direct losses.
Tax Justice Network data scientist Miroslav Palanský said, “The $483 billion lost to tax havens a year is the tip of the iceberg. It’s what we can see above the surface thanks to some recent progress on tax transparency, but we know there’s a lot more tax abuse below the surface costing magnitudes more in tax losses.”
Over 99 per cent of the global tax losses that countries suffer result from multinational corporations and wealthy individuals manipulating the weak tax systems in high income countries, with OECD (Organisation for Economic Cooperation and Development) countries mainly responsible. OECD members were found to be responsible for facilitating 78 per cent of the annual tax losses countries suffer. OECD members facilitate the loss of $378 billion a year from public purses around the world to the wealthiest multinational corporations and individuals.
“New Zealand is not a big player in all of this”, said Glenn Barclay, “but a loss of tax revenue of around $370 million US cannot be overlooked. $197 million of that is due to global corporations avoiding tax and $173 is due to wealthy individuals offshoring assets. That amount would enable New Zealand to fully vaccinate its own population four times over.”
“New Zealand is a member of the OECD and should be taking a stand to reform the international tax system in light of these findings. We need to shift responsibility for rule setting for the international tax system away from the OECD, which is fundamentally conflicted, and transfer it to the United Nations,” said Glenn Barclay.
The State of Tax Justice 2021 is published by the Tax Justice Network, the Global Alliance for Tax Justice and the global union federation Public Services International. It reports that of the $483 billion in tax that countries lose a year, $312 billion is lost to cross-border corporate tax abuse by multinational corporations and $171 billion is lost to offshore tax evasion by wealthy individuals.
Tax Justice Aotearoa is an independent non-governmental organisation launched in 2018, and a partner of the international Tax Justice Network.
We aim to provide information, analysis and advocacy on national and international tax policy and law. We seek to create understanding and promote reform for a fairer society.
We represent a growing movement of people, groups, unions and activists who want to see greater transparency, democratic oversight and redistribution of wealth in national and global tax systems. We are unaligned to any political party.
Original Source: https://thedailyblog.co.nz/2021/11/17/state-of-tax-justice-report-reveals-extent-of-global-tax-abuse-tax-justice/