Tax evasion costs the world $3.1 trillion a year – more than 5% of world GDP

Posted on

The Tax Justice Network has issued new research this morning linked to the launch of its new website – Tackle Tax Havens.

The research highlights the cost of tax evasion – which tax havens assist and facilitate – to the world economy.

I undertook this research for the Tax Justice Network, assisted by Tess Riley.

The data used for the research covers more than 98% of world GDP and 145 countries. The full analysis is available here.

Using sources such as the World Bank, CIA World Factbook, research from the World Bank on shadow economies and Heritage Foundation I was able to prepare what I think likely to be the most reliable estimates of tax lost to tax evasion in the world’s most significant economies. This is summarised in the table below. The data tax evaded is shown in both US dollars and local currency converted at 2010 rates.

Country GDP Size of Shadow Economy Tax lost as a result of Shadow Economy Cost of tax evasion, local currency
US$’m % US$’m m
Albania 11,786 34.3 982 104,483
Algeria 159,426 32.6 4,158 304,145
Angola 84,391 46.6 2,399 215,901
Argentina 368,712 25.3 24,347 96,902
Armenia 9,265 44 685 246,553
Australia 924,843 14 39,879 41,474
Austria 376,162 9.7 15,653 12,053
Azerbaijan 51,092 58 5,245 4,301
Bahamas 7,538 26.5 336 336
Bahrain 20,595 17.9 177 67
Bangladesh 100,076 35.3 3,109 214,504
Belarus 54,713 46.4 7,718 23,229,967
Belgium 467,472 21.9 47,605 36,656
Belize 1,432 42.9 139 279
Benin 6,633 49.8 568 285,953
Bhutan 1,516 28.7 39 0
Bolivia 19,786 66.1 3,727 25,943
Bosnia and Herzegovina 16,888 33.6 2,134 3,200
Botswana 14,857 33 1,481 9,994
Brazil 2,087,890 39 280,111 481,791
Bulgaria 47,714 35.3 5,609 8,413
Burkina Faso 8,820 40.5 432 217,538
Burundi 1,611 39.5 115 142,376
Cambodia 11,343 48.7 580 2,458,723
Cameroon 22,394 32 1,326 667,237
Canada 1,574,052 15.7 79,575 81,166
Cape Verde 1,648 35.4 120 9,815
Central African Republic 2,013 45 72 36,017
Chad 7,588 43.7 176 88,453
Chile 203,443 19.3 7,303 3,554,466
China 5,878,629 12.7 134,385 896,351
Colombia 288,189 37.3 20,746 39,833,161
Comoros 541 38.7 23 8,171
Costa Rica 34,564 25.8 1,391 698,279
Cote d’Ivoire 22,780 45.2 1,565 787,703
Croatia 60,852 32.1 4,551 25,442
Cyprus 25,039 28 2,748 2,116
Czech Republic 192,152 18.4 12,799 238,571
Democratic Republic of the Congo 13,145 47.3 815 733,053
Denmark 310,405 17.7 26,921 153,991
Dominican Republic 51,577 31.9 2,468 91,438
Ecuador 58,910 32.4 3,054 3,054
Egypt 218,912 34.9 11,766 68,123
El Salvador 21,796 45.1 1,278 1,278
Equatorial Guinea 14,007 31.4 40 19,923
Estonia 18,674 31.2 1,882 22,583
Ethiopia 29,717 38.7 1,139 18,775
Fiji 3,009 32.4 206 374
Finland 238,801 17.7 18,260 14,060
France 2,560,002 15 171,264 131,873
Gabon 13,011 47.5 612 307,940
Gambia 807 44.3 69 1,922
Georgia 11,667 65.8 1,912 3,364
Germany 3,309,669 16 214,996 165,547
Ghana 31,306 40.6 2,618 3,797
Greece 304,865 27.5 29,427 22,659
Guinea 4,511 39 259 1,571,866
Guinea-Bissau 879 40.9 37 18,456
Guyana 2,222 33.7 151 30,403
Haiti 6,710 56.4 390 15,007
Honduras 15,400 48.3 1,212 22,915
Hungary 130,419 24.4 12,888 2,798,244
Iceland 12,594 15.6 788 92,231
India 1,729,010 22.2 71,394 3,262,719
Indonesia 706,558 18.9 17,761 158,070,661
Iran 331,015 18.3 3,695 30,407,146
Ireland 203,892 15.8 9,922 7,640
Israel 217,333 22 16,017 58,944
Italy 2,051,412 27 238,723 183,817
Jamaica 13,995 34.8 1,266 108,646
Japan 5,497,813 11 171,147 14,347,246
Jordan 27,574 18.5 934 663
Kazakhstan 142,987 41.1 16,279 2,401,100
Kenya 31,409 33.2 2,179 176,314
Kuwait 109,463 19.3 317 89
Kyrgyzstan 4,616 40.4 435 20,335
Laos 7,492 29.6 277 2,226,225
Latvia 24,010 29.2 2,040 1,102
Lebanon 39,155 33.1 2,151 3,227,116
Lesotho 2,132 30.5 410 2,901
Liberia 986 44.2 125 6,107
Libya 62,360 33.7 715 893
Lithuania 36,306 32 3,555 9,421
Luxembourg 55,096 9.7 1,951 1,502
Macedonia 9,118 37.6 970 44,436
Madagascar 8,721 40.8 459 922,877
Malawi 5,106 41.8 352 53,176
Malaysia 237,804 30.9 11,243 35,639
Maldives 1,480 29.5 92 0
Mali 9,251 40.7 565 284,251
Malta 7,987 27.2 782 602
Mauritius 9,729 22.7 420 12,714
Mexico 1,039,662 30 25,576 319,696
Mongolia 6,083 17.6 330 416,289
Morocco 91,196 34.9 8,562 72,773
Namibia 12,170 30.3 915 6,466
Nepal 15,701 36.7 599 43,717
Netherlands 783,413 13.2 41,157 31,691
New Zealand 126,679 12.4 5,419 7,262
Nicaragua 6,551 44.6 526 11,460
Norway 414,462 18.7 32,629 202,302
Oman 46,866 18.4 259 101
Pakistan 174,799 35.7 6,365 545,492
Papua New Guinea 9,480 36.7 925 2,295
Paraguay 18,475 38.8 846 3,975,539
Peru 153,845 58 14,277 40,403
Philippines 199,589 41.6 11,707 516,283
Poland 468,585 27.2 44,482 138,339
Portugal 228,538 23 19,817 15,259
Qatar 98,313 18.8 906 3,297
Republic of the Congo 11,898 46.4 293 147,263
Romania 161,624 32.6 15,016 49,404
Russia 1,479,819 43.8 221,023 6,940,116
Saudi Arabia 434,666 18.1 5,193 19,472
Senegal 12,954 43.8 1,038 522,584
Sierra Leone 1,905 45.6 94 388,967
Singapore 222,699 12.9 4,079 5,385
Slovakia 89,034 18.1 4,722 3,636
Slovenia 47,763 26.2 4,705 3,623
Solomon Islands 679 33.6 55 407
South Africa 363,704 27.3 25,518 180,411
South Korea 1,014,483 26.8 72,320 83,902,586
Spain 1,407,405 22.5 107,350 82,659
Sri Lanka 49,552 43.9 2,893 322,157
Suriname 3,252 37.8 259 726
Sweden 458,004 18.8 41,244 290,359
Switzerland 523,772 8.5 13,089 13,089
Syria 59,013 19 1,144 53,124
Taiwan 430,600 25 13,887 423,549
Tajikistan 5,640 42.2 445 1,958
Tanzania 23,057 56.4 1,925 2,854,202
Thailand 318,847 50.6 25,814 776,997
Trinidad & Tobago 20,398 33.4 1,322 8,353
Tunisia 44,291 37.2 3,691 5,351
Turkey 735,264 31.3 54,082 81,664
Uganda 17,011 42.3 856 1,980,582
Ukraine 137,929 49.7 25,844 203,906
United Arab Emirates 230,252 25.9 1,073 3,940
United Kingdom 2,246,079 12.5 109,216 69,898
United States 14,582,400 8.6 337,349 337,349
Uruguay 40,265 50.6 3,647 72,575
Venezuela 387,852 33.8 17,829 46,355
Vietnam 103,572 15.1 3,691 71,972,390
Yemen 26,365 27.1 522 111,618
Zambia 16,193 47.1 1,335 6,573,437
61,737,918 3,132,490