Countries are losing US$492 billion in tax a year to multinational corporations and wealthy individuals using tax havens to underpay tax, the 2024 edition of the Tax Justice Network’s State of Tax Justice finds. Nearly half the losses (43%) are enabled by the eight countries that remain, as of writing, opposed to a UN tax convention: Australia, Canada, Israel, Japan, New Zealand, South Korea, the UK and the US.
Key findings
- Countries are losing US$492 billion in tax a year to multinational corporations and wealthy individuals using tax havens to underpay tax.
- Of the US$492 billion lost to global tax abuse a year, two-thirds (US$347.6 billion) is lost to multinational corporations shifting profit offshore to underpay tax. The remaining third (US$144.8 billion) is lost to wealthy individuals hiding their wealth offshore.
- Nearly half the losses (43%) are enabled by the eight countries that remain opposed to a UN tax convention: Australia, Canada, Israel, Japan, New Zealand, South Korea, the UK and the US.
- The biggest enablers of global tax abuse are also some of the biggest losers: US$177 billion lost by the 8 countries that voted against UN tax convention terms in August 2024; US$189 billion lost by 44 those that abstained; US$123 billion lost by 110 countries voting for.
- Multinational corporations are shifting more profit into tax havens and underpaying more on tax, evidencing failure of OECD’s tax reform attempts
- Multinational corporations cheated more after tax rate cuts, disproving “tax appeasement” thinking popular with lobbyists and some politicians
- Offshore tax evasion by wealthy individuals dropped, but by far less than claimed. Majority of wealth offshore still hidden from tax authorities.
Key recommendation
With countries set to vote in November 2024 at the UN on whether to finally enter formal negotiations on the meat of a UN tax convention, the Tax Justice Network is urging all countries to vote in favour of the negotiations. Governments now have a chance to choose differently at the UN, to choose to use tax to protect people, economies and planet.