Tax abuse, money laundering & corruption plague global finance: UN Report

September 24, 2020: A panel of former heads of state and government, past state bank governors, business and civil society leaders, and prominent academics has called on governments around the world to do more to tackle tax abuse and corruption in global finance.

The findings come in an Interim Report released Thursday by the High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel), established by the former presidents of the United Nations General Assembly and the UN Economic and Social Council (ECOSOC).

The FACTI report was discussed at a high-level event, in which Pakistan Prime Minister Imran Khan spoke from Islamabad via video-link to the 15-member panel.

Nigerian Vice President Oluyemi Osinbajo and Norwegian Prime Minister Erna Solberg also spoke on the occasion.

The report says while governments are struggling to agree on the problem or the solution, resources that can help the world’s poor are being drained by tax abuse, corruption and financial crime. Estimates include:

— $500 billion losses to governments each year from profit-shifting enterprises;

— $7 trillion in private wealth hidden in haven countries, with 10% of world GDP held offshore;

— Money laundering of around $1.6 trillion per year, or 2.7% of global GDP (gross domestic product).

Global finance controls have not kept pace with a globalized, digitalized world, the report said.

The FinCen Files involving $2 trillion of transactions revealed this week how some of the biggest banks have allowed criminals to move dirty money around the world. They are the latest reports from investigative journalists showing the system to regulate dirty money has major gaps.

“Corruption and tax avoidance are rampant. Too many banks are in cahoots and too many governments are stuck in the past. We’re all being robbed, especially the world’s poor,” Dr Dalia Grybauskaite, FACTI co-chair and former president of Lithuania, said.

“Trust in the finance system is essential to tackle big issues like poverty, climate change and COVID-19. Instead we get dithering and delay bordering on complicity,” she said.

Criminals have exploited the pandemic, says the report, as governments relaxed controls to speed up healthcare and social protection. “Our weakness in tackling corruption and financial crime has been further exposed by the COVID-19,” said Dr Ibrahim Mayaki, FACTI co-chair and ex-prime minister of Niger. “Resources to stop the spread, keep people alive and put food on tables are instead lost to corruption and abuse,” he said.

The FACTI Panel called for a more coherent and equitable approach to international tax cooperation, including taxing the digital economy, and more balanced cooperation on settling disputes.

The Panel hopes a final report to be published in February 2021, according to officials.

APP

Posted on: 2020-09-24T21:05:00+05:00

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