Tax evasion costs the world $3.1 trillion a year

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

Posted on November 25 2011

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

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One Response

Three important reasons why tax evasion matters in the UK | Liberal Conspiracy says:

November 26 2011 at 9:50 am

[…] yesterday morning on tax evasion is, I think, shocking. The full report is here. I’ve posted a summary table of tax evasion for 145 countries […]