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According to a new report by ActionAid International, titled How Tax Havens Plunder the Poor, almost half of all money invested in developing countries is channeled through tax havens, stripping developing nations of the chance to benefit from the wealth generated by multi-national firms inside their borders.
"These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities." -Jeffrey Sachs, Earth Institute
"Tax havens are one of the main obstacles in the fight against global poverty," said Michael Lewis, an expert on international tax law and lead author of the study. "Their secrecy and harmful tax regimes leach money out of developing countries that could be used to end hunger and provide hospitals, schools and clean water."
As the OECD has pointed out, the world's developing countries are losing three times more money to tax havens than they currently receive in aid each year.
"As we have seen with recent cases like Google and Amazon, tax avoidance is a huge issue in developed countries," Lewis said. "But evidence shows that poor countries are losing even more from tax avoidance, and are least equipped to protect fragile public revenues."
As an example, ActionAid says a single foreign mining firm--one that generates 84 percent of its revenues from Africa--has only four of its 81 corporate subsidiaries registered in African countries. In contrast, 47 of the company's subsidiaries are registered in off-shore tax havens.
According to the report's executive summary, the analysis shows "the primary role of the UK's and the G8's own tax havens in a global merry-go-round that helps keep 1.3 billion people in poverty and hunger, while denying developing countries the ability to benefit from their own wealth, and raise the public funds needed to fight poverty."
Released ahead of the upcoming round of G8 talks in Northern Ireland next month, the report puts special focus on how the world's wealthiest nations have created a global financial structure that makes much of the exploitation of poor, vulnerable countries part of an accepted and legal framework.
"When G8 leaders meet this June," writes Jeffrey Sachs, president of the Earth Institute, in the forward of the report, "they have a responsibility to end one of the biggest and most dangerous scams in the world economy: the global web of tax and secrecy havens that they so lovingly have nurtured over the years. These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities."
Sachs continued:
The politicians continue to protect their exorbitant privileges, or listen to their billionaires and continue to wink at mega-tax evasion, or listen to their major companies and continue to tolerate unpardonable games of transfer pricing into the havens, are playing with fire. The days of high living are over. We are now all sharing austerity. The havens represent unacceptable privilege and abuse, not fair sharing.
This new study provides powerful evidence that four years after world leaders promised an "end to tax havens" in the wake of the financial crisis, the scale of tax havens' hold over developing economies, and the systematic exploitation of their facilities by wealthy investors and businesses in those economies, has only increased. Put simply, the revenue lost as a result could enable developing countries to finance their own futures free from poverty.
Stating that the world's most powerful countries, all represented in the G8, have a unique responsibility when it comes to corporate exploitation, Sachs concluded, "They created this system. It's their job to end it."
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According to a new report by ActionAid International, titled How Tax Havens Plunder the Poor, almost half of all money invested in developing countries is channeled through tax havens, stripping developing nations of the chance to benefit from the wealth generated by multi-national firms inside their borders.
"These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities." -Jeffrey Sachs, Earth Institute
"Tax havens are one of the main obstacles in the fight against global poverty," said Michael Lewis, an expert on international tax law and lead author of the study. "Their secrecy and harmful tax regimes leach money out of developing countries that could be used to end hunger and provide hospitals, schools and clean water."
As the OECD has pointed out, the world's developing countries are losing three times more money to tax havens than they currently receive in aid each year.
"As we have seen with recent cases like Google and Amazon, tax avoidance is a huge issue in developed countries," Lewis said. "But evidence shows that poor countries are losing even more from tax avoidance, and are least equipped to protect fragile public revenues."
As an example, ActionAid says a single foreign mining firm--one that generates 84 percent of its revenues from Africa--has only four of its 81 corporate subsidiaries registered in African countries. In contrast, 47 of the company's subsidiaries are registered in off-shore tax havens.
According to the report's executive summary, the analysis shows "the primary role of the UK's and the G8's own tax havens in a global merry-go-round that helps keep 1.3 billion people in poverty and hunger, while denying developing countries the ability to benefit from their own wealth, and raise the public funds needed to fight poverty."
Released ahead of the upcoming round of G8 talks in Northern Ireland next month, the report puts special focus on how the world's wealthiest nations have created a global financial structure that makes much of the exploitation of poor, vulnerable countries part of an accepted and legal framework.
"When G8 leaders meet this June," writes Jeffrey Sachs, president of the Earth Institute, in the forward of the report, "they have a responsibility to end one of the biggest and most dangerous scams in the world economy: the global web of tax and secrecy havens that they so lovingly have nurtured over the years. These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities."
Sachs continued:
The politicians continue to protect their exorbitant privileges, or listen to their billionaires and continue to wink at mega-tax evasion, or listen to their major companies and continue to tolerate unpardonable games of transfer pricing into the havens, are playing with fire. The days of high living are over. We are now all sharing austerity. The havens represent unacceptable privilege and abuse, not fair sharing.
This new study provides powerful evidence that four years after world leaders promised an "end to tax havens" in the wake of the financial crisis, the scale of tax havens' hold over developing economies, and the systematic exploitation of their facilities by wealthy investors and businesses in those economies, has only increased. Put simply, the revenue lost as a result could enable developing countries to finance their own futures free from poverty.
Stating that the world's most powerful countries, all represented in the G8, have a unique responsibility when it comes to corporate exploitation, Sachs concluded, "They created this system. It's their job to end it."
_____________________________________________________________
According to a new report by ActionAid International, titled How Tax Havens Plunder the Poor, almost half of all money invested in developing countries is channeled through tax havens, stripping developing nations of the chance to benefit from the wealth generated by multi-national firms inside their borders.
"These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities." -Jeffrey Sachs, Earth Institute
"Tax havens are one of the main obstacles in the fight against global poverty," said Michael Lewis, an expert on international tax law and lead author of the study. "Their secrecy and harmful tax regimes leach money out of developing countries that could be used to end hunger and provide hospitals, schools and clean water."
As the OECD has pointed out, the world's developing countries are losing three times more money to tax havens than they currently receive in aid each year.
"As we have seen with recent cases like Google and Amazon, tax avoidance is a huge issue in developed countries," Lewis said. "But evidence shows that poor countries are losing even more from tax avoidance, and are least equipped to protect fragile public revenues."
As an example, ActionAid says a single foreign mining firm--one that generates 84 percent of its revenues from Africa--has only four of its 81 corporate subsidiaries registered in African countries. In contrast, 47 of the company's subsidiaries are registered in off-shore tax havens.
According to the report's executive summary, the analysis shows "the primary role of the UK's and the G8's own tax havens in a global merry-go-round that helps keep 1.3 billion people in poverty and hunger, while denying developing countries the ability to benefit from their own wealth, and raise the public funds needed to fight poverty."
Released ahead of the upcoming round of G8 talks in Northern Ireland next month, the report puts special focus on how the world's wealthiest nations have created a global financial structure that makes much of the exploitation of poor, vulnerable countries part of an accepted and legal framework.
"When G8 leaders meet this June," writes Jeffrey Sachs, president of the Earth Institute, in the forward of the report, "they have a responsibility to end one of the biggest and most dangerous scams in the world economy: the global web of tax and secrecy havens that they so lovingly have nurtured over the years. These havens facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities."
Sachs continued:
The politicians continue to protect their exorbitant privileges, or listen to their billionaires and continue to wink at mega-tax evasion, or listen to their major companies and continue to tolerate unpardonable games of transfer pricing into the havens, are playing with fire. The days of high living are over. We are now all sharing austerity. The havens represent unacceptable privilege and abuse, not fair sharing.
This new study provides powerful evidence that four years after world leaders promised an "end to tax havens" in the wake of the financial crisis, the scale of tax havens' hold over developing economies, and the systematic exploitation of their facilities by wealthy investors and businesses in those economies, has only increased. Put simply, the revenue lost as a result could enable developing countries to finance their own futures free from poverty.
Stating that the world's most powerful countries, all represented in the G8, have a unique responsibility when it comes to corporate exploitation, Sachs concluded, "They created this system. It's their job to end it."
_____________________________________________________________