Canada losing billions of dollars to offshore tax havens
Canada is losing $7.9 billion dollars to tax havens, according to a new study timed ahead of the G20 leaders meeting this weekend.
The State of Tax Justice report found that’s equivalent to the annual salaries of 100,000 nurses in Canada.
“Offshore tax dodging by wealthy Canadians and large corporations is robbing governments of many billions in foregone revenues that could be used to pay for critical programs through the COVID-19 crisis,” said Toby Sanger, director of Canadians for Tax Fairness.
The report also estimates that Canada is responsible for $10.5 billion in tax losses in other countries and that poorer nations suffer the most.
The State of Tax Justice says corporate tax losses, including a race to the bottom in corporate tax rates is having an even larger effect, which it estimates is between $12.5 billion to $68 billion. For comparison, the PBO estimates it’s around $25 billion.
“Canada needs to step up its efforts against corporate tax dodging, which has serious economic and social costs. It’s the world’s largest corporations and wealthiest individuals who are also the biggest tax dodgers.”
“This has not only robbed governments worldwide of hundreds of billions in revenues, but also led to much greater inequalities and corporate concentration, which hurts consumers, smaller businesses, and our economy. Canada and other countries can’t afford to allow these abuses anymore,” Sanger said.
Ahead of the G20 Canadians for Tax Fairness is urging governments to take action. It’s calling for a tax on excess profit for multinational corporations that are making more as a result of the pandemic, and a wealth tax to fund the COVID-19 response and address long-term inequalities made worse by the crisis.
It also wants to see a UN tax convention to ensure global and genuine representation to set multilateral standards for corporate taxation, tax cooperation, and tax transparency. It’s also calling for public country-by-country reporting of the financial and tax statements of multinational corporations
The report found over $560 billion is lost to offshore tax havens. The countries losing the most are the U.S., UK, Germany, France, and Brazil.
“Now more than ever we must reprogram our global tax system to prioritize people’s health and livelihoods over the desires of those bent on not paying tax,” said Alex Cobham, chief executive of the Tax Justice Network.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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