News / 29 November 2011

“Tackling Tax havens can tackle crisis”

Tax evasion costs 145 countries, representing over 98% of world GDP, more than US$3.1 trillion annually. This is concluded by the Tax Justice Network in a recently published report. With their campaign 'Tackle Tax Havens' the network wants to inform the public of the negative impact of tax havens on the global economy.

Human costs
The research compares the amounts of tax that national governments lose or fail to collect, to the amount of money spent on health care in that particular country. This comparison helps to get insight into the enormous costs of tax evasion. Europe as a whole loses the equivalent of 87% of its total healthcare budget to tax evasion, while Africa loses 98% and South America 139%. In 67 countries, tax evasion losses are larger than their entire health care budgets. By calculating the impact on health, the study reveals the human cost. This new research immediately demonstrates how important it is to tackle tax havens, the Tax Justice Network claims in its press release.

Culture of tax evasion
By paying taxes individuals and organisations contribute to services that directly benefit them - from the health and education systems that support their workforces, to the roads that ship their goods to markets. Tax havens enable these -mostly wealthy- individuals and organisations to avoid paying a contribution, the Tax Justice Network argues. "Tackling tax havens is a crucial part of ending the culture of tax evasion", says John Christensen, Director of the Tax Justice Network. "Tax evasion is crippling public finances across the world but governments aren't doing nearly enough to end this cancer." Richard Murphy of Tax Research UK, who conducted the research, even dares to claim that Europe would not be facing a crisis today, if only more had been done to tackle rampant tax evasion.

Dutch policy

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 and increase taxes in ways that hurt the poor and the middle classes the most. Tax Justice NL, a network of eight civil society organisations including Both ENDS, also sees tax avoidance as a global problem that needs to be tackled urgently. Both governments and multinational companies should make an effort to combat this problem. Already since 2007, the network - along with partner organisations - exert an influence on Dutch policy makers and public opinion. Tax Justice NL urges the Dutch government to adjust its tax policies to the goals that have been formulated in Dutch policy on international development.

For more information:

Press release Tax Justice Network

Tackle Tax Havens website

Campaign video

Tax Justice NL website

Full research findings and methodology

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