Huge Cost of Tax Evasion Revealed as Campaign to Tackle Tax Havens Launches

May 8, 20New research published by the Tax Justice Network shows that tax evasion costs governments around the world more than US$3.1 trillion annually.

In Canada an estimated $81 billion a year is lost to tax evasion in the ‘shadow economy’ - that is half of our total healthcare spending. Canada ranks 11th out of the 145 countries surveyed in total amount of tax evaded.

Tax havens are a major part of the tax evasion problem – and these new findings come as the Tax Justice Network launches Tackle Tax Havens, a new campaign that highlights the critical role that these secretive states play in corrupting the global economy.

The issue of tax collection is rising fast up the political and social agenda, as countries across the world make deep cuts in public spending in ways that hurt the poor and the middle classes the most.

This new research demonstrates how important it is to tackle tax evasion and the tax havens that help wealthy individuals and corporations escape from contributing to the services that directly benefit them - from the health and education systems that support their workforces, to the roads that ship their goods to markets, to the courts of law that enforce their contracts or to the police who protect their property.

But tax havens are not just about tax: they cause colossal damage on many fronts. Tackle Tax Havens aims to inform the public about the offshore system and the problems it causes -- and to show what we can do about it.

Other key findings of the new report include:

• Africa as a whole loses the equivalent of  98% of its total healthcare budget to tax evasion
• 119 of the 145 countries surveyed are losing over half of their healthcare budget to tax evasion
• In 67 countries, tax evasion losses are larger than their entire health budgets
• In Bolivia, tax evasion is more than four times as large as that oil rich country's health spending. In Russia, it is more than three times the size
  
• More than $1 in every $6 earned in the world is not subject to tax because those earning it have deliberately ensured that their income is hidden from the world’s tax authorities
  
• In Greece and Italy, where economic collapse currently looks possible, more than €1 in €4 is hidden in the shadow economy

Quotes:

Dennis Howlett: Coordinator of Canadians for Tax Fairness

“Canada needs to do more to curb tax havens and tax evasion, especially when deficit-cutting threatens to gut our social programs and undermine the ability of government to ensure food safety and environmental protection. A new study by the Tax Justice Network estimates that Canada is losing over $80 billion a year. That is more than half of all our health care spending. Going after resource extraction companies and Canadian banks, as well as many rich individuals who are taking advantage of tax havens to avoid paying taxes to Canada and to the developing countries where they are extracting resources, is a much better way to reduce the deficit than cutting spending on health, education and environmental protection.”15 by PressProgress