A new report by the Tax Justice Network has revealed that the global community, including Nigeria, loses $492 billion in taxes annually to multinational corporations and wealthy individuals who use tax havens to underpay taxes.

The report included at least 20 countries (territories) under the Corporate Tax Haven Index (CTHI), which ranks countries most complicit in helping multinational companies underpay corporate tax.

At the top of the list is the British Virgin Islands with 3,061 points, followed by the Cayman Islands (2,891), Bermuda (2,478), Switzerland (2,279), Singapore (2,059), Hong Hong (1,948), the Netherlands (1,945) and Britain. Crown Dependency, Jersey (1,756), Ireland (1,622) and Luxembourg (1,480).

The Bahamas ranked 11th with 1,313 points, followed by the Isle of Man (1,144), Guernsey (1,122), Cyprus (1,046), and Mauritius (the only African country among the tax havens) ranked 1,005. is ranked.

China ranks 974th; United Arab Emirates (UAE), 964; United Kingdom (England) 894, France 883 and Malta 747.

The report also stated that the United Kingdom and its second empire are responsible for more than a quarter (26%) of all countries’ tax losses, costing countries $129 billion a year.

The report stated that Nigeria, in particular, suffered an annual loss of $383.9 million from profit and tax losses due to global corporate tax abuse.

The recently released 2024 State of Tax Fairness report found that $347.6 billion of the $492 billion in global annual tax losses was due to cross-border corporate tax abuse by multinational corporations.

The total global loss consists of the total costs of cross-border tax abuse by multinational corporations and individuals with offshore undeclared assets.

Almost half (43 percent) of the losses were due to control tax loopholes by eight countries that defied the United Nations (UN) tax convention.

These include Australia, Canada, Israel, Japan, New Zealand, South Korea, the United Kingdom and the United States.

Ironically, these eight individuals, whose actions are the biggest facilitators of global tax abuse, are also among the biggest losers.

These eight countries, a small group of high-income countries, make up about 8 percent of the global population and are known to prevent the world from agreeing to tax rules at the United Nations designed to prevent global tax abuse.

According to the report, the largest component of global tax losses continues to be cross-border corporate tax abuses, with multinational companies responsible for approximately one-third of global economic production, half of world exports and approximately one-quarter of global employment.

He explained that tax abuses are a global economic problem of the first order, depriving governments of tax revenues, widening inequalities between and within countries, and undermining smaller and domestic businesses that account for the majority of employment.

The report argued that global tax abuse harms everyone, highlighting that high-income countries lose larger sums, but low-income countries’ losses make up a larger share of their budgets.

“Low-income countries lose five times as much share of their public health budgets as high-income countries,” he added.

The Tax Justice Network’s annual State of Tax Fairness report measures how much tax each country loses annually to global tax abuse.

He noted that the latest data (October 2024) shows that multinational corporations are shifting $1.42 trillion worth of profits annually to tax havens, causing governments worldwide to lose $348 billion annually in direct tax revenues.

The report found that eight countries that recently voted against UN tax treaty provisions lost $177 billion; The 44 countries that abstained lost $189 billion, and the 110 countries that voted in favor lost $123 billion.

According to the report, the fact that multinational companies shift more profits to tax havens and pay more taxes proves the failure of the Organization for Economic Co-operation and Development (OECD) tax reform initiatives.

The report explained that offshore tax evasion by wealthy individuals has decreased, but is much less than claimed, and stated that the majority of offshore wealth is still hidden from tax authorities.

As countries prepare to vote shortly at the UN on whether they will finally enter into formal negotiations on the content of the UN tax convention, the Tax Justice Network has called on all countries to vote in favor of the negotiations.

“Governments now have a chance to make a different choice at the UN, choosing to use taxation to protect people, economies and the planet,” the report said.

The negotiation of the UN tax convention is widely seen as the biggest change in the global tax system in history and was previously reported in last year’s issue of Government Magazine as the world’s best chance to avoid losing nearly $5 trillion to tax havens over the next decade. Tax Justice.

The report found that two-thirds of the $492 billion ($347.6 billion) lost annually due to global tax abuse is lost to multinational companies that shift profits overseas to underpay tax.

The remaining third ($144.8 billion) is lost to wealthy individuals who stash their wealth overseas.

Ndubuisi Francis

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