Fin24

Trillions hidden in tax havens - report

2012-07-23 08:08

London - The world's wealthiest individuals have stashed $21 trillion worth of assets in offshore tax havens, equivalent to the combined GDPs of the United States and Japan, a tax transparency report said on Sunday.

The report commissioned by campaign group Tax Justice Network drew data from a wide range of sources including the Bank of International Settlements and the International Monetary Fund.

Report author James Henry, former chief economist at consultancy McKinsey, said that the headline figure was conservative, adding that up to $32 trillion may have found its way into havens such as the Cayman Islands and Switzerland.

According to Henry, these assets are "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy".

The report found that the top 10 private banks managed more than $6 trillion in 2010, up from $2.3 trillion five years earlier.

Tax expert and British government adviser John Whiting said he was doubtful of the figure.

"There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?" he asked.

The Tax Justice Network campaigns for tax transparency and against tax havens.

Comments
  • justin.pretorius - 2012-07-23 08:21

    So what? If the money was illegally gained then that is a problem but countries are desperate for money and just scavenging

      boramk - 2012-07-23 08:44

      If you earned a lot of money that's great, but what every citizen of every country should to is to pay his or hers fair share of taxes, that includes the rich. These people who put their money offshore do so to avoid these taxes and it is something to be condemned. $21 trillion? You could improve so many hospitals, schools and roads with that.

  • Shaun Robinson - 2012-07-23 08:30

    @Justin - Tax 101, go study it...

      denny.cray - 2012-07-23 11:04

      Most universities don't actually have Tax 101. It is normally a 3rd year+ course. (I know - I did tax 3 and 4). I would however suggest everyone read up on tax law. The interplay between income tax (corporate and personal), capital gains, VAT and dividends tax is critical. This understanding makes it very easy to see through politicians lies when it comes to issues like "taxing the rich".

  • capetownphotographer - 2012-07-23 08:48

    I stashed it for a rainy day.

      lownabester - 2012-07-23 11:44

      It's always rainy in the Cape.......

  • ianon.ym - 2012-07-23 09:01

    Firstly - how do you arrive at this figure, Secondly if you know that figure to be true you should know who some of the culprits are as how else did you arrive to your conclusion, Thirdly - knowing all this why don't you do something about it and stop squealing like a stuck pig - if laws are made like swiss cheese providing gaps to be taken by clever advisers then so be it.

  • ian.flack2 - 2012-07-23 09:05

    I take it Uncle Robert next door is on the list....???????????

  • trevor.nel - 2012-07-23 09:54

    If only our organisation could get access to just a % of those trillions to help us in our effort to rid the world of ERW's ( explosive remnants of war)and landmines.

  • alan.smart.102 - 2012-07-23 11:02

    I see no problem with people moving their money to tax havens as a solid investment. As long as it is clean money.

      denny.cray - 2012-07-23 12:05

      Typically the reason money ends up in these safe havens is to escape excessive taxation. There are real costs and risks associated with investing in these offshore havens. Unfortunately government efforts to raise taxes on the rich/soft targets (often for political purposes) drives investment away from bring reinvested in the country of origin. I'm far from a fan of Art Laffer but I'd suggest reading this article all the same: http://danieljmitchell.wordpress.com/2011/11/06/a-lesson-on-the-Laffer-curve-for-barack-obama/

      alan.smart.102 - 2012-07-23 21:12

      The problem is that with current SA laws, it makes no sense to re-invest into our own economy. A perfect example of this is capital gains taxes, which in effect boils down to double taxation. You have to be mad to invest in this country.

  • johnathon.masters - 2012-07-23 11:15

    Hope a lot of this money is South African, which has then been moved out of the hands of the despicable, greedy, self serving, Goverment running SA at present.

  • triumphant.voice.58 - 2012-07-23 11:26

    The problem for most Governments at the moment is liquidity, and as much as it may surprise, private individuals can be the source of loans to sovereign states. So, any particular government's aversion to high volumes of cash stashed in the current global economy is that if that money were injected into any given economy, it is actually stimulus to revive the economy or it's something to tax for the same reason. If you are a citizen of a sovereign state then the whole purpose behind the audit is to find an excuse to tax you rather than a reason regardless of whether you got the money legally and honestly. In retrospect, what political figure would really not want to poke away at the wealthy in their own country especially in a downed economy when a trillion or so in loans could save millions of jobs and keep the civilian population civil, but the problem is that the wealthy say no because the ROI at the moment does not make it worthwhile.

  • Tawana - 2012-07-23 15:27

    Why not use this ILLEGAL money to bailout those broke 'governments' in Europe and US?

  • maureen.churchill.9 - 2012-07-23 15:52

    Wish I had some there.

  • maureen.churchill.9 - 2012-07-24 06:25

    As long as their taxes have been paid, and they have a CLEAN AUDIT bully for them, I don't envy them just wish I could get even and be one of them.

  • thefat.canarie - 2012-11-07 07:47

    McKinsey? This company thumbsucks most of its info - look what they did with the SABC ... a once profitable institution that made profits of of R 194 Million a year had become another crippled state orphan...being more than a R1 billion in the red!!! Thank you McKinsey...I certainly do not believe you ... not even your prayers! So please shut up, you have no integrity!

  • lisa.a.bradshaw - 2012-11-07 08:45

    The problem with high earning tax evasion is that the middle man ordinary citizen ends up paying for everyone....wealthy people should pay their share and government workers should earn reasonably and not have high wages!!

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