Bangladesh in a year loses around $703.40 million in taxes, which is about 62 per cent of the country’s public health expenditure, mainly due to corporate tax abuse and offshore tax evasion, according to a global report.
Of the amount, corporate tax abuse causes annual tax loss worth $674.24 million and offshore tax evasion is responsible for the remaining $29.15 million loss in taxes, said the report released by the Tax Justice Network on Friday.
The country could pay annual salaries of 3.92 lakh nurses with the amount lost in taxes, it said.
The annual loss in taxes is 3.46 per cent of the collected tax revenue.
The amount of offshore wealth of the country is $1.9 billion, the report titled ‘the State of Tax Justice 2020: Tax Justice in the Time of COVID-19’ said.
According to the report, the world is losing over $427 billion in tax a year to international tax abuse.
Of the amount, nearly $245 billion is lost to multinational corporations shifting profit into tax havens in order to underreport how much profits they actually made in the country where they do business and consequently pay less taxes than they should.
The remaining $182 billon is lost to wealthy individuals hiding undeclared assets and incomes offshore, beyond the reach of the law, the report said.
The TJN, a London-based global alliance for tax justice, said that Bangladesh’s most vulnerable trading channel was inward foreign direct investment.
The United States, United Kingdom and Singapore are the most responsible for the vulnerability.
The TJN in a statement said that it had sifted through records worldwide in the first global study of its kind — and urged global action over shadowy tax havens that have diverted billions of dollars from nations currently fighting the Covid-19 pandemic, reports AFP.
The network, which is an umbrella grouping of non-governmental organisations, examined multinationals’ tax declarations and figures gathered by the Paris-based Organisation for Economic Co-operation and Development from 2016.
It also assessed individuals’ 2018 data from the Bank for International Settlements.
‘Countries are losing a total of over $427 billion in tax each year to international corporate tax abuse and private tax evasion,’ the TJN concluded in its study.
This amounted to the equivalent of almost 34 million nurses’ annual salaries per year, it said.
The TJN also estimated that the total tax-evasion sum comprised $245 billion committed by businesses — and $182 billion committed by individuals.
Multinational corporations are shifting about $1.38 trillion of profits via tax havens, while private individuals are investing more than $10 trillion in assets there, according to the study.
The world’s richest regions including Europe and North America take the biggest financial hit from evasion.
The study named British overseas territory the Cayman Islands as the haven responsible for the greatest global tax loss.
Other leading tax havens include other British overseas territories, the Netherlands, Luxembourg, low-tax US states such as Delaware, and Hong Kong.
‘Under pressure from corporate giants and tax haven powers like the Netherlands and the UK’s network, our governments have programmed the global tax system to prioritise the desires of the wealthiest corporations and individuals over the needs of everybody else,’ said TJN chief executive Alex Cobham.
‘The pandemic has exposed the grave cost of turning tax policy into a tool for indulging tax abusers instead of for protecting people’s wellbeing.
‘Now more than ever we must reprogramme our global tax system to prioritise people’s health and livelihoods over the desires of those bent on not paying tax.’
News Courtesy: www.newagebd.net