daniel chigunwe
South Africa is losing $3,5 billion (R54 billion at current exchange rates) to global tax abuse committed by multinational corporations and wealthy individuals, according to a new report by tax justice campaigners.
The 2021 edition of the State of Tax Justice, an annual look into how the super-rich and global corporations evade taxes, found that SA lost US$2,9 billion to corporate tax abuse and US$648 million to tax abuse by rich people in 2021.
The lost taxes would have been enough to fully vaccinate SA’s population three times over, the report notes.
The annual investigation was published yesterday by the Tax Justice Network, the Global Alliance for Tax Justice and the global union federation Public Services International (PSI).
PSI counts the South African Municipal Workers Union as an affiliate in SA, among others.
The report found that US$483 billion is being lost to tax abuse worldwide per year.
According to Tax Justice Network data scientist Miroslav Palanský, this may only be the “the tip of the ice”It’s what we can see above the surface thanks to some recent progress on tax transparency, but we know there’s a lot more tax abuse below the surface costing magnitudes more in tax losses,” he said.
How’s it done?
The most common strategy for multinationals was to simply shift their profits into tax havens, the report found.
“By placing holding companies and important value-creating assets in corporate tax havens, large corporations can shift their profits to low tax or no tax jurisdictions,” it found. —fin24
Online Reporter