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Saturday, Jul 24, 2021

Tax abuse and money laundering is trapping billions in poverty, says UN

Tax abuse and money laundering is trapping billions in poverty, says UN

Billions of people around the world are being trapped in poverty by systemic tax abuses, corruption and money laundering, according to a UN commission report calling for a global crackdown.
The UN panel on financial integrity for sustainable development urged governments to overhaul tax rules and the banking system to help end poverty and tackle the climate emergency.

It said up to 10% of the world’s wealth could be hidden offshore at a time when governments were under growing financial strain because of the Covid pandemic, and as inequality soars.

The panel of world leaders, central bank governors and business and civil society representatives said criminals were laundering assets worth as much as 2.7% of global GDP each year.

They said it was an alarming testament to the way the international financial system was skewed in favour of the wealthy, that even during a pandemic billionaires’ wealth had increased by 27.5% between April and July last year when the rest of the world had been plunged into turmoil.

In its final report, the high-level panel on international financial accountability, transparency and integrity (Facti) says greater coordination between countries is required to impose sanctions on enablers of financial crime.

Ibrahim Mayaki, the co-chair of the panel and former prime minister of Niger, said: “Closing loopholes that allow money laundering, corruption and tax abuse and stopping bankers, accountants and lawyers from enabling crime are steps in transforming the global economy for the universal good.”

The report calls for an international minimum corporate tax rate, more progress towards taxing digital companies and measures to improve the transparency of company ownership and public spending.

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