2% global min tax on the rich can raise $250bn'
A key finding showed that a large
amount of profits is shifted to tax havens, estima ted at $1 trillion in 2022.
Recent studies estimate developing
countries need $500 billion annually in additional public revenueto address challenges
of climate change, as per EU Tax Observatory's Global Tax Evasion Report
The report backs creation of a
global asset registry to fight tax evasion more effectively
Offshore Tax Evasion by wealthy
individuals has shrunk ,thanks to automatic exchange of bank information.
A global minimum tax on billionaires equ al
to 2% of their wealth should be levied, an European tax think tank has recommen
ded, asserting that it could help raise close to $250 billion in revenues from
less than 3,000 individuals annually.
The EU Tax Observatory,a research laboratory
set up in 2021 with expertise on international tax issues, has also said that a
strengthened glo- bal minimum tax on multinational companies, free of loopholes,
would raise an addi tional $250 billion per year.
"To give a sense of the magnitudes involved, recent studies estimate that developing co untries need $500 billion annually in additional public revenue to address the challenges of climate change needs that could be fully addressed by the two main reforms we propose," from the findings of think tank's Global Tax Evasion Report.
The report said offshore tax evasion by
wealthy individuals has shrunk, thanks to the automatic exchange of bank
information, and it has declined by a factor of about three over the last 10
years.
"Before 2013, households owned the
equivalent of 10% of world GDP in financial wealth in tax havens globally, the
bulk of which was undeclared to tax authorities and belonged to high-net-worth
indi viduals. Today there is still the equivalent of 10% of world GDP in
offshore house hold financial wealth, but in our central scenario only abo ut
25% of it evades taxation," according to the report.
A key finding showed that a large
amount of profits is shifted to tax havens, estima ted at $1 trillion in 2022.
"This is the equivalent of 35% of all
the profits booked by multinational companies outside of their headquarter
country. The corporate tax re- venue losses caused by this shifting are
significant, the equivalent of nearly 10% of corporate tax revenues collec ted
globally US multinationals are responsible for about 40% of global profit
shifting. and continental European countries appear to be the most affected by
this evasion," said in the report. The report said since the political
agreement of 2021, the global minimum tax has been severely weakened by a
growing list of loop- holes. In 2021, more than 140 countries and territories
agreed to implement a land- mark minimum tax of 15% on multinational profits..
