Billions of people around the world are being trapped in poverty by systemic tax abuses, corruption and money laundering, according to the UN panel on financial integrity for sustainable development.
It said up to 10% of the world’s wealth could be hidden offshore. Illicit financial flows (IFFs) — from tax abuse, cross-border corruption, and transnational financial crime — drain resources from sustainable development. They worsen inequalities, fuel instability, undermine governance, and damage public trust. Ultimately, they contribute to States not being able to fulfil their human rights obligations.
The Facti report says recovering losses to tax avoidance and evasion could help countries such as Bangladesh expand its social safety net to 9 million more elderly, in Chad it could pay for 38,000 classrooms, and in Germany it could build 8,000 wind turbines.
The panel of world leaders, central bank governors and business and civil society representatives said criminals were laundering assets worth as much as 2.7% of global GDP each year.
The UK has steadily cut the rate of corporation tax to 19%, among the lowest in the advanced world. However, the government is thought to be considering raising the tax rate. Ireland’s corporate tax rate is 12.5%. Several UK overseas territories and crown dependencies, including the British Virgin Islands, Guernsey and Jersey, have a zero corporation tax rate.