Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, representing up to $280bn in lost income tax revenues, according to research published on Sunday.
The study estimating the extent of global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses – puts the sum at between $21 and $32 trillion.
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“What’s shocking is that some of the world’s biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore.“
– John Christensen, the Tax Justice Network
This amounts to roughly the US and Japanese GDP combined. Roughly 10 million people worldwide have offshore accounts, with 100,000 people owning half of those secreted assets.
The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co.
John Christensen of the Tax Justice Network told Al Jazeera that he was shocked by “the sheer scale of the figures”.
“What’s shocking is that some of the world’s biggest banks are up to their eyeballs in helping their clients evade taxes and shift their wealth offshore,” said Christensen.
“We’re talking about very big, well-known brands – HSBC, Citigroup, Bank of America, UBS, Credit Suisse – some of the world’s biggest banks are involved… and they do it knowing fully well that their clients, more often than not, are evading and avoiding taxes.”
Much of this activity, Christensen added, was illegal.
He used data from the World Bank, International Monetary Fund, United Nations and central banks. The report also highlights the impact on the balance sheets of 139 developing countries of money held in tax havens by private elites, putting wealth beyond the reach of local tax authorities.
The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of “unrecorded offshore wealth” by 2010.
Private wealth held offshore represents “a huge black hole in the world economy,” Henry said in a statement.