The UK is at the helm of a global network of tax abuse by multinational corporations and wealthy individuals, which costs the world $483bn a year and hits low-income countries the hardest.
The latest report by the Tax Justice Network found that the UK leads the OECD in its contribution to global tax loss, inflicting $68.2bn of annual tax loss on other countries, 14 per cent of the global total.
In fact, the only country in the world with a bigger role in enabling global tax abuse is the Cayman Islands, which is a British Overseas Territory – where the UK has law-making power. The Cayman Islands is responsible for $83bn in tax losses: $45bn by enabling global private tax evasion and $38bn by enabling global corporate tax abuse.
The handful of countries blacklisted by the EU as tax havens, which include Panama, Fiji and American Samoa, collectively only facilitated 0.51 per cent of global tax loss last year.
In comparison, the collection of countries the Tax Justice Network refers to as the “axis of tax avoidance”, which includes the UK and its territories, Netherlands, Luxembourg and Switzerland, are responsible for 55 per cent of tax losses inflicted on the world, a total of $268bn a year.
By the Tax Justice Network’s calculations, this is 18 times the amount spent on facemasks over the past two years, or enough to vaccinate the global population at least twice over.
But while low-income countries in Africa, Asia and the Carribean bear little or no responsibility for global tax abuse, they still disportionately feel its effects. For example, Chad loses the equivalent of 17 per cent of its GDP annually in tax abuse, but inflicts no tax losses on other countries.