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At least $21tn hidden in tax havens

English: Welcome sign at Owen Roberts Internat...

English: Welcome sign at Owen Roberts International Airport in George Town, Grand Cayman Island (Photo credit: Wikipedia)

Tax havens: Super-rich ‘hiding’ at least $21tn

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined.

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for the Tax Justice Network.

Tax expert and UK government adviser John Whiting said he was sceptical that the amount hidden was so large.

Mr Whiting, tax policy director at the Chartered Institute of Taxation, said: “There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?”

The Top 10 private banks — including Swiss banking giants UBS AG and Credit Suisse Group AG, as well as U.S. investment bank Goldman Sachs Group Inc. — managed more than $6.25 trillion of this money in 2010, up from $2.3 trillion in 2005.

The report, using information from the Swiss-based Bank of International Settlements — which is not accountable to any national government — the International Monetary Fund and other sources, suggests that many developing countries would have more than enough to pay off their debts to the rest of the world if the capital hadn’t flowed out of their economies since the 1970s.

About $10 trillion in assets is owned by only 92,000 people, or 0.001 percent of the world’s population, the report said.

The “huge, secretive offshore industry has truly become the dark side of globalization,” the report concluded. It urged renewed efforts by developed countries to gain a handle on the problem.

The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks.

The group that commissioned the report, Tax Justice Network, campaigns against tax havens.

Mr Henry said that the super-rich move money around the globe through an “industrious bevy of professional enablers in private banking, legal, accounting and investment industries.

Mr Whiting, though, urged caution. “I cannot disprove the figures at all, but they do seem staggering. If the suggestion is that such amounts are actively hidden and never accessed, that seems odd – not least in terms of what the tax authorities are doing. In fact, the US, UK and German authorities are doing a lot.”

He also pointed out that if tax havens were stuffed with such sizeable amounts, “you would expect the havens to be more conspicuously wealthy than they are”.

* Report: Super rich hide $21T to $32T

If You Had $21 Trillion, Where Would You Hide It?


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