MEDIA RELEASE: Over C$560 billion in revenues lost to tax havens each year: global study
State of Tax Justice report looks at tax losses by country and worst offenders
November 20, 2020
OTTAWA – Countries around the world are losing over C$560 billion in revenues annually to international corporate tax dodging and private tax evasion, according to a new global study by the Tax Justice Network. This is equivalent to the annual salaries of 34 million nurses.
The study estimates that Canada loses C$7.9 billion annually to tax havens, equal to the salaries of over 100,000 nurses in Canada. It also estimates that Canada is responsible for $10.5 billion in tax losses in other countries, with poorer developing countries suffering the most.
“Offshore tax dodging by wealthy Canadians and large corporations is robbing governments of many billions in foregone revenues that could be used to pay for critical programs through the COVID-19 crisis,” said Toby Sanger, director of Canadians for Tax Fairness.
The UK-based Tax Justice Network study estimated that a total of US$427 billion (or C$561 billion) is lost to tax havens each year globally. For higher income countries, the losses are equal to an average of 8% of their public health budgets, but for lower-income countries the losses are much worse, equal to more than half their public health budgets.
The report also estimated that overall tax losses for Canada–including impacts of the race to the bottom in corporate tax rates—amounted to between US$9.5 billion and US$52 billion (C$12.5 billion to C$68 billion). A report last year by the Canada Revenue Agency found corporations account for 40% of the government’s overall tax gap while the PBO has estimated Canada could be losing as much as $25 billion annually to corporate offshore tax avoidance.
“Canada needs to step up its efforts against corporate tax dodging, which has serious economic and social costs. It’s the world’s largest corporations and wealthiest individuals who are also the biggest tax dodgers. This has not only robbed governments worldwide of hundreds of billions in revenues, but also led to much greater inequalities and corporate concentration, which hurts consumers, smaller businesses, and our economy. Canada and other countries can’t afford to allow these abuses anymore,” Sanger said.
Ahead of the G20 leaders meeting this weekend, Canadians for Tax Fairness supports the report’s calls for actions from governments to clamp down on tax haven abuse and reverse the inequalities that have been exacerbated by tax losses:
- Introduce an excess profits tax on multinational corporations making excess profits during the pandemic
- Introduce a wealth tax to fund the COVID-19 response and address long-term inequalities made worse by the crisis
- Establish a UN tax convention to ensure global and genuine representation to set multilateral standards for corporate taxation, tax cooperation, and tax transparency
- Introduce public country-by-country reporting of the financial and tax statements of multinational corporations
“These measures would go a long way to help the Liberals fulfill their recent commitment of finding new ways to tax extreme wealth inequality while also recovering billions in revenues to help Canada’s fight against COVID-19,” Sanger concluded.
The State of Tax Justice 2020 was produced by the UK-based Tax Justice Network in collaboration with the Global Alliance for Tax Justice and Public Services International, using detailed information recently made available by the OECD. The report, background material and individual country reports are available at: https://taxjustice.net/reports/the-state-of-tax-justice-2020/ . The report is also available in French.
The Tax Justice Network is holding a webinar November 20 from 8 a.m. to 9 a.m. EST to discuss the results of their study and the role of tax justice in the time of COVID-19. Register online here: https://us02web.zoom.us/webinar/register/WN_ga1LsdEFTPaQzH5xn62Udg
Communications Coordinator, Canadians for Tax Fairness
To coordinate an interview with the Tax Justice Network, please contact firstname.lastname@example.org
Canadians for Tax Fairness is a non-profit organization that advocates for progressive taxes to fund important public services, reduce inequality and strengthen the economy.