The Institute for Fiscal Studies has said it that it thinks there may be a deficit of £39 billion in the UK budget as a result of the financial crisis — a cost of £1,250 per annum for each family.
I haven’t checked the numbers, but will take them at face value for now.
What I do know is that half of this could be paid for by tackling tax havens. I estimate they cost the UK at least £18.5 billion a year — and that excludes the loss on stamp duty.
This is why the G20 was important. Even if the OECD delivers little the mood has changed for good. Tax havens are not now outside the sightlines — governments all over the world will rightly see them as the source of revenue they need — revenue currently stolen from them by those with the greatest capacity to pay tax.
Domestic measures will end tax havens — and will build the progressive taxation systems we need to create tax justice, a fairer society, and a greener world.
And people will not tolerate a bill of £39 billion when they could pay just half that. Which is why change is inevitable.
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Short of invasion, there is nothing the OECD can do to stamp out avoidance through tax havens. The only way to find out what is really going on is to put the tanks on their lawns and that is not going to happen.
However, the tax avoidance landscape is worse than that. The European Court of Justice itself has conspired against the high tax countries of the European Union by preventing the shifting of profits to countries such as Estonia and Ireland where little or no tax is payable. Only minimal activities in these locations are required to prevent the UK, Germany, France etc. taxing the profits booked there. If the EU can’t sort out its own house, what hope has it got of sorting out the world?
The US is in no better. Its tax system supports the use of tax havens to subsidise its export industries and the manufacturing concessions granted to Puerto Rico have to be seen to be believed.
Goodbye tax havens? Hello tax havens more like.
Martin, I do agree with the word “hello”, instead of “goodbye”when dealings with tax havens.But please keep in mind that tax evasion is a better term than that of tax avoidance.To me it is a criminal act, because the ultimate goal of this scheme is that the richer nations getting richer, while the poorer nations getting poorer. ❗
By the way, Martin,who will get benefit from notorious tax holiday ‘competition’ programs among developing countries ? Where do you stand ? Most economists are in favor of it.I am not.It forced me to fight with my neighbor to attract investment by lowering tax,while the capital owner somehow is paying tax in other part of the world…… 🙁