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Global Tax Evasion Totals 427bn USD Per Annum

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Global tax evasion accounts for a loss of revenue totalling 427bn USD per year, according to reports by UK-based campaigning group, Tax Justice Network.

Multinational corporations account for $245bn of this, while $182bn is lost annually through private tax evasion. Lower income countries are proportionately the hardest hit, losing approximately 5.8% of their total revenue to global tax abuse. In contrast, higher income countries lose 2.5%. Higher income countries account for 98% of global tax losses.

The biggest offenders of tax evasion are reported to be the Cayman Islands, the UK, the Netherlands, Luxembourg, the US, Hong Kong, China, and the British Virgin Islands. Collectively, EU member states account for 36% of global tax losses, or a loss of US$7bn worth of global tax revenue per annum. Globally, over fifty percent of tax losses are the result of moving money from the country of origin into jurisdictions that are seen to be tax havens.

Alex Cobham, chief executive of the Tax Justice Network, has called for a “reprogramming” of the global tax system to ensure that citizens’ health and livelihoods are protected. Cobham has advocated for the introduction of an “excess profit tax” for large multinational companies whose profits, Cobham noted, have not suffered to the same degree/ that local, indigenous businesses have during lockdowns resulting from the Covid19 pandemic.

According to Tax justice Network, Ireland is ranked as the eleventh worst country for corporate tax evasion and the fourth worst European offender of tax evasion, accounting for 3.7% of all global losses and costing other countries almost $16bn/€13.5bn annually in lost revenues.

However, the UK has been revealed to be guilty of much higher levels of tax evasion activities, with England and its overseas territories accounting for more than a third of global tax avoidance in 2019, or US$42bn.

As many of us are experiencing the worst pandemic of our lifetimes, it is estimated that tax evasion in Europe amounted to the equivalent of one-eighth of its health budget in 2019. According to Cobham, “The pandemic has exposed the grave cost of turning tax policy into a tool for indulging tax abuse … [we now must] prioritise people’s health and livelihoods over the desires of those bent on not paying tax.”

Rosa Pavanelli, general secretary at Public Services International, has attributed the “enabling [of] corporate tax abuse” to years of privatisation and austerity measures. According to Pavanelli, the time has now come for multinational corporations to make sizeable contributions to health and other public services.


APSco SIA CM Member