A new study published by global advocacy group, the Tax Justice Network (TJN) shows that annually, the BVI accounts for some 3.81 percent of global tax loss.
This data means the BVI accounts for almost four percent of the money that other countries around the world would have collected as tax from corporations and used to fund public services.
The report titled “The State of Tax Justice” is the first study to measure thoroughly how much every country loses to both corporate tax abuse and private tax evasion.
Its data shows the top 15 countries that account for the most tax losses in the world. The BVI places eighth on the list. In figures — the reported tax loss inflicted on other countries because of wealth said to be hidden in the BVI is more than $16 billion.
The country that placed first on the list is the Cayman Islands, which is responsible for 16.5 percent of global tax losses, equal to more than $70 billion. The others that rounded out the top five are:
2. The UK (10 per cent — over $42 billion)
3. The Netherlands (8.5 per cent — over $36 billion)
4. Luxembourg (6.5 per cent — over $27 billion)
5. US (5.53 per cent — over $23 billion).
The report shows that countries around the world are losing a total of over $427 billion in tax each year because of international corporate tax abuse and private tax evasion.
Multinational corporations and private citizens account for this amount taken away from countries’ tax coffers yearly.
The report shows that $245 billion is directly lost to corporate tax abuse by multinational corporations while $182 billion is lost to private tax evasion.
According to the report, multinational corporations paid billions less in tax than they should have by hiding $1.38 trillion worth of profit in tax havens, “where corporate tax rates are extremely low or non-existent”.
“Private tax evaders paid less tax than they should have by storing a total of over $10 trillion in financial assets offshore,” the report said.
The BVI’s Financial Services industry has come under fire from global groups in recent years. The territory was previously under threat of being blacklisted by superpowers such as European Union who accused the BVI of being a notorious tax haven. But later said it recognised the territory as a cooperative jurisdiction as it relates to its tax policies.
Be that as it may, the the aforesaid study has found that, collectively, “EU blacklisted jurisdictions cause less than 2% of global tax losses, EU member states cause 36%”.
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