UK central to US$483 billion annual losses due to tax abuse by multinational companies and wealthy individuals

Tax abuse by multinationals and ultra-wealthy individuals causes annual tax losses of US$483 billion worldwide according to a new report by the Global Alliance for Tax Justice, Public Services International and the Tax Justice Network.

The largest share of tax losses of US$312 billion is due to cross-border corporate tax abuse by multinational corporations while US$171 billion is lost to offshore tax evasion by wealthy individuals

UK spider’s web

The UK and its dependent territories, which the report calls the “UK spider’s web” are responsible for a third of the corporate tax losses.

Meanwhile the “axis of tax avoidance” – UK spider’s web, Netherlands, Luxembourg and Switzerland – are together responsible for half. In total, OECD member countries and their dependencies account for seven of every ten dollars lost.

The UK spider’s web is responsible for fully a half of the world’s offshore tax evasion losses. The axis of tax avoidance is responsible for two thirds. In total, OECD member countries and their dependencies account for more than nine of every ten US dollars lost.

Suggested solutions

In the second report of its kind, The State of Tax Justice 2021 concludes that the solutions should include moving rule-making on international tax from the OECD to the UN.

An excess profits tax on multinational corporations that made excess profits as a result of pandemic lockdowns and interventions should be introduced alongside wealth taxes on the wealthiest individuals.

The State of Tax Justice 2021 can be found here.

 



Categories: Trade Based Financial crimes News

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