Friday, November 27

Spain loses 3,700 million a year due to tax evasion


The Cayman Islands, one of the places most benefited by tax evasion.

The Cayman Islands, one of the places most benefited by tax evasion.
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The tax evasion in the world, by companies or individuals, it costs each year $ 427 billion (equivalent to 360,231 million euros) of direct losses to public finances for the benefit of tax havens. This is stated in a report published this Friday by the NGO Tax Justice Network, on the eve of the annual summit of the G20, which takes place this weekend in Riyadh (Saudi Arabia). The report estimates the loss of income in Spain at 3.7 billion euros for tax evasion.

In its report entitled ‘The State of Tax Justice 2020, the NGO estimates country by country the financial flow abroad destined to evade taxes, without entering into the debate on whether it is legal or illegal. Figures are compiled from data released this summer by the OECD (Organization for Economic Cooperation and Development) based on the data provided by 26 countries on the businesses of its 4,000 multinationals country by country, relative to the 2016 financial year.

For individuals, the Tax Justice Network is based on bank deposit data available at the Bank for International Settlements (BIS) as of 2018.

The OECD report did not include data on Spanish multinationals, not having been provided by the administration of Spain. In any case, the Tax Justice Network study estimates the loss of revenue from the Treasury at almost 3,700 million euros due to tax evasion by multinationals (about 2,500 million) and people with high income levels (almost 1,200 million).

In the midst of the coronavirus pandemic, he compares his figures with the costs of public health and concludes that rich countries are primarily responsible for tax evasion that has the greatest impact on poor countries. Of those 427,000 million dollars lost in taxes – the equivalent of the annual salary of 34 million nurses – 245,000 million dollars correspond to companies (57%) and 182,000 million dollars (42%), to individuals.

“Shameful tragedy”

“Even before the coronavirus pandemic, the events revealed would be scandalous. Given that the coronavirus pandemic highlights the serious cost of underfunded public and health services around the world, these figures represent a tragedy,” the document emphasizes. “It’s more, a shameful and unnecessary tragedy caused by the complicity of multinational companiess, who have made great efforts to evade their fiscal responsibilities, and from the OECD and numerous national governments, who have stalled a significant reform of the deficient international tax system and actively concealed from their populations the magnitude and scope of international tax abuse “denounces this report, in the context of the summit of the leaders of the 20 most important economies in the world (the G20).

The report states that multinationals pay far less taxes than they should Thanks to the fact that they displace the equivalent of 1.38 trillion dollars (1.26 million euros) in profits from the countries where they are generated to tax havens or to countries with very low taxation that do not always belong to black lists such as those prepared by the European Union. For their part, individuals transfer more than 10 billion dollars annually to these places.

Who wins and who loses?

The regions that lose the most in absolute terms are the richest. North America loses $ 95 billion annually and Europe $ 184 billion, which in the middle of the pandemic is equivalent to 5.7% and 12.6% respectively of their health budgets. Latin America and Africa lose less money, but the impact is much greater, representing 20.4% and 52.5% of their respective budgets for healthcare.

The report also examines which countries benefit the most. The Cayman Islands, overseas territory of United Kingdom, is the big winner with 16.5%, followed by United Kingdom (10%), Holland (8,5%), Luxembourg (6.5%) and United States (5,53%).

The report urges world leaders to allow the publication of tax data for multinationals on a country-by-country basis, as the OECD figures are only published in aggregate form.

The NGO also advocates an increase in taxes on companies and large fortunes to compensate for the inequalities caused by a pandemic in which some have gotten rich while many lost their jobs or businesses.

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