Tax evasion costs more than the entire health budget in each of 67 countries, according to new research published by the Tax Justice Network.
Launching its ‘tackle tax havens’ campaign to highlight the role that secretive states play in ‘corrupting the global economy’, the TJN has ranked 145 countries according to revenues lost to tax evasion.
‘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,’ it said.
The group estimated that the UK loses almost £70bn a year to evasion, equivalent to ‘56% of the country’s total healthcare spend’. Worldwide, the cost is estimated at $3.1 trillion, equivalent to 5% of GDP.
In The Cost of Tax Abuse, published today,the TJN defines evasion as the 'illegal non-payment of tax’.
Campaigners have estimated that the UK also loses £25bn a year through legal tax avoidance by large businesses and wealthy individuals.
The UK government is considering the possible introduction of a general anti-avoidance rule. This week, after a year-long study, Graham Aaronson QC recommended a targeted anti-abuse rule that would leave ‘the centre ground of responsible tax planning’ unaffected.
'Economic warfare'
TJN Director John Christensen said: 'Tax havens are engaged in economic warfare against the tax regimes of sovereign countries, and these estimates reveal the human cost in terms of the impact on health services.’
Richard Murphy, Director of Tax Research UK, prepared the new research on the basis of data published last year by the World Bank on the size of ‘shadow economies’.
‘The findings add a new policy agenda to public debate on the world’s financial crisis,’ he said. ‘For example, Italy loses €183bn to tax evasion a year. Its current debt of €1.9 trillion represents just over 10 years tax of tax evasion on this basis. If only more had been done to tackle rampant tax evasion, Europe would not be facing a crisis today.’
The TJN called for all tax havens to put on public record the accounts and details of ownership of all locally-based companies and trusts; all multinational companies to publish accounts showing their use of tax havens; and automatic exchange of information on income arising to citizens of other countries.
HMRC has estimated the UK's tax gap for 2009/10, including evasion and avoidance, at £35bn.
Tax evasion costs more than the entire health budget in each of 67 countries, according to new research published by the Tax Justice Network.
Launching its ‘tackle tax havens’ campaign to highlight the role that secretive states play in ‘corrupting the global economy’, the TJN has ranked 145 countries according to revenues lost to tax evasion.
‘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,’ it said.
The group estimated that the UK loses almost £70bn a year to evasion, equivalent to ‘56% of the country’s total healthcare spend’. Worldwide, the cost is estimated at $3.1 trillion, equivalent to 5% of GDP.
In The Cost of Tax Abuse, published today,the TJN defines evasion as the 'illegal non-payment of tax’.
Campaigners have estimated that the UK also loses £25bn a year through legal tax avoidance by large businesses and wealthy individuals.
The UK government is considering the possible introduction of a general anti-avoidance rule. This week, after a year-long study, Graham Aaronson QC recommended a targeted anti-abuse rule that would leave ‘the centre ground of responsible tax planning’ unaffected.
'Economic warfare'
TJN Director John Christensen said: 'Tax havens are engaged in economic warfare against the tax regimes of sovereign countries, and these estimates reveal the human cost in terms of the impact on health services.’
Richard Murphy, Director of Tax Research UK, prepared the new research on the basis of data published last year by the World Bank on the size of ‘shadow economies’.
‘The findings add a new policy agenda to public debate on the world’s financial crisis,’ he said. ‘For example, Italy loses €183bn to tax evasion a year. Its current debt of €1.9 trillion represents just over 10 years tax of tax evasion on this basis. If only more had been done to tackle rampant tax evasion, Europe would not be facing a crisis today.’
The TJN called for all tax havens to put on public record the accounts and details of ownership of all locally-based companies and trusts; all multinational companies to publish accounts showing their use of tax havens; and automatic exchange of information on income arising to citizens of other countries.
HMRC has estimated the UK's tax gap for 2009/10, including evasion and avoidance, at £35bn.
