A report published this week by the University of Amsterdam finds that that five countries, the UK, the Netherlands, Switzerland, Singapore and Ireland, together account for 47 percent of all global investment flows into offshore financial centres – also known as ‘tax havens’. It finds that the UK and the Netherlands are the jurisdictions most used to route money to tax havens.
It is women and girls that suffer most when public services aren’t properly funded through taxation. Women tend to be more reliant on public services than men, and are more likely to have to take on additional unpaid care work for children or elderly or sick relatives when services aren’t properly provided by the state. Tax revenue is also vital for the achievement of the Sustainable Development Goals, agreed by all countries at the UN in 2015.
Poorer countries are some of those most exposed to tax havens. In 2015 alone, ActionAid UK estimates that $132 billion of investment in India had been routed via tax havens (42% of total investment into India), and $35 billion in Nigeria (43% of investment into Nigeria). These countries desperately need more money to fund public services: in Nigeria, average life expectancy is just 52 years, with 1 in 13 children dying before their fifth birthday. In India, less than half of girls attend secondary school, and more than a quarter of young women (15-24 years) are illiterate.
Responding to the report, ActionAid’s Tax policy advisor Anders Dahlbeck said:
‘It is unsurprising to see that a lot of investment going to tax havens is still routed through rich countries like the UK and the Netherlands. In fact, earlier this year ActionAid UK research showed that 44 percent of total foreign direct investment globally - US$12.4tn - is now owned through tax havens.
Financial secrecy, low tax rates and favourable tax treaty networks mean that companies can legally route their money through these jurisdictions to minimise tax payments elsewhere. Developing countries are disproportionately affected by this broken tax system, and no one suffers more than women and girls living in poverty, as public services like education and health care are starved of resources when companies don’t pay their fair share.
While there has been some reform of the international tax system in recent years, these efforts have clearly not been sufficient. The UK and other rich country governments must now set out their plans to improve transparency in UK-linked tax havens by ensuring they introduce comprehensive public registers of beneficial ownership as soon as possible.’
For an interview with Anders or more information, please contact Melanie Stern, Senior Media Adviser, at +44 207 122 0589 or e-mail at firstname.lastname@example.org
Find out more about ActionAid UK’s policy on tax havens, latest tax policy reports, and information on our work to make tax law benefit women and girls in the poorest countries.