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22 May, 2013 15:53

$150 bn lost in tax havens enough to end extreme poverty twice over – report

$150 bn lost in tax havens enough to end extreme poverty twice over – report

Oxfam, the UK based charity, estimates that some $18.47 trillion is being held by individuals in tax havens around the world. Of this some $7.18 trillion is in accounts situated in British Overseas Territories and Crown Dependencies.

Tax lost in tax havens is enough to end global extreme poverty twice over according to new figures published by Oxfam, Wednesday. 

Although a deal was done earlier this month to get some of these tax havens to be more transparent and share tax information, there is still no tax deal on the table that will benefit poor countries who are struggling to reclaim billions of dollars.

In the agreement British tax havens in the Caribbean have said they will provide information on offshore bank accounts.

Tax havens take desperately needed cash from poor countries as well as from citizens at home who are being hit by austerity measures, the international agency said.

Some of the major world, EU and British tax havens are the Bahamas, Luxembourg, the British Virgin Islands and the Isle of Mann, which is located under 50miles away from the UK mainland.

“These figures put the UK at the center of a global tax system that is a colossal betrayal of people here and in the poorest countries who are struggling to get by, and put the government on the side of the privileged few,” said Emma Seery, Oxfam’s head of Development Finance and Public Services, in a statement.

The $156 billion in lost tax revenue is estimated by Oxfam to be just a fraction of the total tax lost, as it only reflects the amount of tax individuals are neglecting to pay and doesn’t include tax dodged by companies that costs poor countries a further $160 billion a year.

Caribbean islands.(Reuters / Desmond Boylan)

Oxfam is part of the Enough Food for Everyone IF campaign, which is calling on the G8 to make all tax havens join a multinational agreement to share tax information.

The campaign includes more than 200 UK anti-poverty organizations and calls on the British government use its presidency of the G8 to launch a Convention on Tax Transparency, where countries would commit to preventing individuals and companies from making their wealth untraceable.

“The crucial thing at G8 is that any tax deal is multilateral, which means the developing world would be able to recoup the money owed to them,” Emma Seery told RT.

The UK Prime Minister David Cameron is attending an EU summit Wednesday where European heads of state and government will be addressing the unfair global tax system. Two thirds of the world’s offshore wealth, some $12.29 trillion is sitting in European linked tax havens, including the British ones.

“Britain’s credibility is on the line; talking tough on tax, whilst continuing to usher a third of the world’s wealth into UK tax havens, risks making a mockery of David Cameron’s leadership at the G8 summit in June,” Seery said.

Oxfam says the EU is set to fail on imposing countermeasure sanctions against tax havens and those using them and that they won't come out of Brussels with a deal.

In fact the EU meeting will be about harmonizing tax across the trading bloc. Attempts for a better exchange of information on what tax multinationals are paying, which were meant to be global rather than European in scope, have been taken over by various attempts to create a consolidated EU corporate tax base.