Rich dodge US$156b tax on hidden assets, says Oxfam
International agency Oxfam says the world's wealthy have managed to hide away at least US$18 trillion in offshore havens where they pay no tax
The world's rich have hidden at least US$18.5 trillion in tax havens around the globe, causing the loss of more than US$156 billion in tax revenue, according to Oxfam.
The international aid agency says the unpaid tax is twice the sum required for every person in the world to live above the extreme poverty threshold of US$1.25 a day.
Oxfam has found that two-thirds of this global offshore wealth, or more than US$12 trillion, are hidden in European tax havens such as Luxembourg, while a third of offshore wealth, or more than US$6 trillion, is sitting in tax havens linked to Britain, such as the British Virgin Islands and the Cayman Islands, undeclared and untaxed.
European leaders yesterday targeted a year-end deadline to do away with banking secrecy, hoping to recoup €1 trillion (HK$10 trillion) a year in lost tax each year.
In 2010, Luxembourg ranked fourth as the target of outward foreign direct investment from mainland China and Hong Kong, receiving US$10.4 billion, according to Global Financial Integrity, which tracks fund flows.
Luxembourg is the preferred European location for Chinese investments into Russia, a KPMG report said. The British Virgin Islands account for most of Hong Kong's offshore business, much of which involve mainlanders.
Kevin Roussel, Oxfam's head of essential services campaign, said: "It's scandalous so much money is allowed to sit untaxed. There's enough potential tax to be had on hidden private money to end extreme world poverty twice over."