The fraud was uncovered through a research project by the Washington-based International Consortium of Investigative Journalists, detailing how rich individuals hide their wealth from tax authorities. These mechanisms are akin to the financial trickery used by multinational corporations to avoid and evade taxation.
A former chief economist at McKinsey has estimated that such tax dodging has withheld as much as $32tn from governments, depriving them of crucial revenue and leading to the impoverishment of hundreds of millions of people in developing countries — each year, tax dodging denies developing countries hundreds of billions worth of income, leaving them needlessly dependent on foreign aid.
Tax dodging thrives because it is shrouded in secrecy. And we can, indeed must, end this culture of untruthfulness and misinformation. The US and EU have taken real steps towards increasing the transparency of mining and oil companies. It is now time to extend similar levels of transparency to the finance industry.
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