A new report says that at least 21 trillion dollars, is being held around the world, in what are known as offshore accounts, or tax havens. This is as much money as the entire annual economic outputs of the US and Japan, combined but this belongs to just 10 million people worldwide who have offshore bank accounts. John Christensen from the Tax Justice Network, an organisation fiercely critical of tax havens and economist, Richard Rahn, a former Cayman Islands banking regulator and now a senior fellow at the Cato Institute, a libertarian think tank spoke to Al Jazeera. Rahn says the statistics in the report are bogus.
Super rich hold $32 trillion in offshore havens
LONDON | Sun Jul 22, 2012 1:49pm BST
(Reuters) – Rich individuals and their families have as much as $32 trillion (20 trillion pounds) of hidden financial assets in offshore tax havens, representing up to $280 billion 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.
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.
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.
(Reporting by Chris Vellacott)