November 24, 2020

Corruption, extortion and money laundering: Time for the G20 to act

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Corruption, extortion and money laundering will be on the agenda this week (Feb 25-26) when the G20 Anti-Corruption Working Group meets in Moscow. They will have to act decisively and strongly to stem the flood of dirty money bleeding poor countries dry.

Tax havens and developed western economies facilitated the illicit outflow of nearly $6 trillion from developing countries over the past 10 years, research by Global Financial Integrity has found – money that could have been used to invest in health and education, and end hunger in the world’s poorest countries. Oxfam calculates that just over a quarter of the taxes that could be raised each year from money now hidden away in tax havens would be enough to lay the foundation to end global hunger.

It’s estimated that there is $32 trillion sitting in tax havens globally, which could raise $189 billion annually if it were taxable. Just $50.2 billion a year is the level of additional investment needed, combined with other policy measures, to end global hunger. In 2009, the G20 agreed to take action against tax havens secrecy by negotiating new transparent tax cooperation agreements.

There’s been some progress: a new Anti-Corruption Action Plan for 2013-14, and a commitment last year to closing the gap between anti-corruption actions plans and declarations, and actual implementation and enforcement. But so far a G20 tax haven crackdown has largely failed to materialize.

The leaders of the world’s largest economies can’t stand by as tax havens take billions from the pockets of ordinary people in rich and poor countries alike.

The G20 now needs to commit to mandatory country-by-country reporting by multinational companies, lifting the veil of secrecy on taxes paid in countries where they operate, and ensuring they pay their fair share.

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