Governments worldwide lose annually over $150 billion of tax revenue due to money hidden in tax havens, twice the amount necessary to eliminate extreme poverty, according to estimates by charity organization Oxfam. The organization considers it is time for Prime Minister David Cameron to move from words to action and to take tough measures against British-linked tax havens. Oxfam asked the British premier to support an international agreement that would end the secrecy and allow developing countries to recover amounts of hundreds of billions of dollars. Oxfam estimates that nearly $18.5 trillion is held in tax havens, of which one third in British territories.
Even with a more conservative estimate, the $18,500 billion would bring the worldwide tax authorities revenues of $156 billion, while the amount needed to provide an income of $1.25 per day for each person globally is $66 billion.
“These figures put the UK at the centre of a global tax system that is a colossal betrayal of people here and in the poorest countries who are struggling to get by, and they put the government on the side of the privileged few. If they want to get on the right side of this debate, now is the time to take action,” said Emma Seery, Director of Development Finance and Public Services at Oxfam.
Emma Seery added: ” Britain’s credibility is on the line; talking tough on tax, whilst continuing to usher a third of the world’s wealth into UK tax havens, risks making a mockery of David Cameron’s leadership at the G8 Summit in June.”
Luxembourg and Austria strongly oppose the exchange of information about savings. A spokeswoman for the Treasury said: “As the prime minister said in his recent letter to the Overseas Territories and Crown Dependencies, we want to ensure information exchange works effectively for both developed and developing countries. That is why we strongly support the multilateral convention on mutual assistance in tax matters which will assist information exchange with those developing countries that join the convention.”
Solving the problem of tax havens will be one of the main topics of discussion at the G8 summit, chaired by the UK, which will be held next month in Northern Ireland.
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