UN-WIDER Says Tax Avoidance Costs World $500 Billion a Year, US Loses $188 Billion
Updated
Updated · World Economic Forum · Apr 12
UN-WIDER Says Tax Avoidance Costs World $500 Billion a Year, US Loses $188 Billion
1 articles · Updated · World Economic Forum · Apr 12
Summary
$500 billion in annual revenue is lost globally to tax avoidance, according to a new UN-WIDER report, with the United States accounting for the biggest country loss at $188 billion and China second at $66.8 billion.
UN-WIDER said the burden looks sharper when measured against GDP, with low- and lower-middle-income countries—especially in sub-Saharan Africa, Latin America and the Caribbean, and South Asia—hit harder than major economies.
The report said overall losses have risen since 1980, particularly in OECD countries, though the picture is more mixed when losses are compared as a share of GDP.
More than 100 countries and jurisdictions are already working through the OECD's BEPS project, a 15-point plan launched in 2013 to curb profit shifting to low- or no-tax jurisdictions.
With rival UN and OECD tax plans, will developing nations gain tax justice or face greater corporate exploitation?
Will new laws targeting professional 'gatekeepers' finally sever the lifeline that enables massive corporate tax avoidance?
A decade after the Panama Papers, why do transparency laws still fail to unmask the ultimate owners of global corporations?
Trillions Lost: How Global Tax Avoidance Undermines Development and Why UN-Led Reform Matters
Overview
This report explores how multinational corporations exploit the global tax system, rooted in the century-old arm's-length principle, to shift profits to tax havens and avoid paying taxes where they actually do business. It highlights the limitations of treating each part of a corporation as a separate entity, which enables profit shifting and underpayment of taxes in countries where real value is created. The report discusses the push for reform through unitary taxation, the growing role of the United Nations in global tax negotiations, and the need for better data and transparency to support fairer tax policies and development, especially for vulnerable countries.