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How global tax evasion keeps poor countries poor - The Washington Post
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About half of foreign investment in poor developing countries is sent through tax havens resulting in tax revenues lost to poor countries. Here Max Bearak of the Washington Post points to a offshore to offshore transaction when Vodafone bought a company Hutchison Essar in India- Vodafone based in Netherlands and Hutchison in the Cayman and British Virgin Islands both tax havens- the result being a loss of $2.2 billion in tax revenues to India. This is about what it costs to provide subsidized meals to schoolchildren in India, says Bearak. The Tax Justice Network says the figure of Angel Gurria of the OECD that 3 times the foreign aid is lost through such tax evasion is a bit low, its estimate is as high as ten times foreign aid lost through tax evasion of this type.
Angel Gurria, Secretary General of OECD, on the loss of three times of foreign aid for developing countries though tax evasion using tax havens
04/08/2016
Poorer developing countries have a large informal economy which does not generate tax revenue. These countries depend on foreign investment, taxes on transactions and the small formal economy to generate tax revenue. Angel Gurria, head of the OECD, says ppor countries lose three times what they get in foreign aid because of tax evasion. Estimates show that about half of foreign investment coming to poor countries comes through tax havens. Typical is a transaction by Vodafone that bought Hutchison Essar in India in an offshore to offshore transaction because both companies are based in tax havens in places like the Netherlands and Mauritius. If this was not the case it would generate $2.2 billion in tax revenues for India, about what it costs to provide subsidized meals to schoolchildren in India, according to Max Bearak of the Washington Post. The Panama Papers Scandal in 2016 revived the issue of tax havens, and tax evasion, that was a major issue in the media coverage following the 2008 financial crisis.
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How global tax evasion keeps poor countries poor - The Washington Post
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What tax havens are costing the U.S. and poor developing countries each year- $40 billion for the U.S. Treasury, 3-10 times foreign aid for poor countires
04/08/2016
The $40 billion estimate of loss to the U.S. Treasury from tax havens is by Robert Morgenthau, U.S. District Attorney for Manhattan. The 3-10 times foreign aid estimate of loss in tax revenues for poor countries dependent on such taxes because of large informal economies, is from Angel Gurria, head of OECD for three times, and as high as ten times from the Tax Justice Network. This means poor infrastructure development, fewer roads and less spent on education and healthcare in poor countries with desperate needs especially in Africa and parts of northern India, Pakistan. Its not just poor countries, as the U.S. also needs the money to replace older crumbling infrastructure, an issue in the 2016 U.S. presidential campaign
Grouped Articles
How global tax evasion keeps poor countries poor - The Washington Post
Washington Post 04/08/2016
The New York Times 08/12/2016
Fact-Checking Apple’s Claims on E.U. Tax Ruling
The New York Times 08/31/2016
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