business human rights politics

Tax evasion: the top ten biggest losers

Globally, $1 in every 6 goes illegally untaxed, squirreled away through clever accounting, tax havens and shadow companies. The Tax Justice Network has calculated the size of the international shadow economy and drawn up a list of countries and what they lose to tax evasion. Here are the top ten biggest losers, with the estimated lost revenue:

  1. United States – $337,349,000 ,000
  2. Brazil – $280,111,000,000
  3. Italy – $238,723,000,000
  4. Russia – $221,023,000,000
  5. Germany – $214,996,000,000
  6. France – $171,264,000,000
  7. Japan – $171,147,000,000
  8. China – $134,385,000,000
  9. United Kingdom – $109,216,000,000
  10. Spain – $107,350,000,000

Those are absolute totals. Some countries lose more proportionally to the size of government spending, and some countries are worse than others even within the top ten. Around 8.6% of the US economy is going untaxed, for example, while Russia’s shadow economy accounts for 43.8% of the country’s GDP. Greece or Spain are losing 27% and 22% respectively – an often unreported factor in their sovereign debt problems.

In total, the global economy loses around $3.1 trillion to tax evasion, equivalent to just over 5% of global GDP.

4 comments

  1. I always have serious doubts about figures like these, whether relating to tax evasion or to benefit cheats. Where do the figures come from? How can anyone know unless they identify the individual cases and add them up? If they do that, the culprits can be prosecuted. My suspicion is always that the figures are guesses, usually by someone seeking to get action to have them reduced.

    I don’t doubt that there is a lot of tax evasion, but a lot more legal-but-should-be-illegal tax avoidance, whereas those making exaggerated guesses of benefit cheating are usually trying to justify yet more oppression of the genuine cases.

  2. By nature the shadow economy is impossible to put exact figures to, but the Tax Justice Network explains its methodology if you follow the link. The totals are derived from IMF estimates of the shadow economy for each country, coupled with countries’ own GDP statements and tax requirements.

    If you know what your GDP is, what tax you’re expecting to gather and how much actually comes in, it’s not difficult to get a rough estimate of how big the problem is. It’s imprecise, but it’s not guesswork either.

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