Countries around the world stand to lose upwards of $4.7 trillion in revenues over the next 10 years due to the use and abuse of tax havens by corporations and wealthy individuals, according to a new study released Tuesday.
The Tax Justice Network, a U.K.-based group that advocates for tax fairness, based its analysis on data from 47 nations in the Organization for Economic Cooperation and Development, and limitations in the data mean that the revenue gap could be considerably larger. Even the basic estimate, though, points to an enormous loss of government revenues. “The future losses of public money would be equivalent to losing a year of worldwide spending on public health,” the group said.
Pegging the annual tax revenue loss in 2023 at an estimated $472 billion, the Tax Justice Network said that $301 billion of that total is related to multinational corporations moving profits into tax havens, while $171 billion is produced by wealthy individuals hiding their money offshore.
In response to the ongoing losses, the group calls for a “democratic revolution” in global tax rules to be led by the United Nations. “For sixty years, global tax rules were decided behind closed doors at the OECD where a handful of countries and lobbyists saw tax policy as something to cater to the interests of the wealthiest corporations and billionaires," said Alex Cobham, the group's chief executive. "We now have a real shot at bringing this process into the daylight of democracy at the UN, where all countries will finally get a real say, and where governments will finally have to answer to their people on tax policy.”