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

 
Sterling pound notes James Henry says his $21tn figure is a conservative estimate

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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?"

Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.

His study deals only with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

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.

"The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.

"From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems," he said.

'Huge black hole'

James Henry says his $21tn figure is a conservative estimate

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens that is put beyond the reach of local tax authorities.

Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of "unrecorded offshore wealth" by 2010.

Private wealth held offshore represents "a huge black hole in the world economy," Mr Henry said.

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".

Other findings in Mr Henry's report include:

  • At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1tn in cross-border invested assets for private clients
  • The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs
  • Less than 100,000 people worldwide own about $9.8tn of the wealth held offshore.

Mr Henry told the BBC that it was difficult to detail hidden assets in some individual countries, including the UK, because of restrictions on getting access to data.

A spokesman for the Treasury said great strides were being made in cracking down on people hiding assets.

He said that in 2011-12 HM Revenue & Customs' High Net Worth Unit secured £200m in additional tax through its compliance work with the very wealthy.

He said that agreements reached with Liechtenstein and Switzerland will bring in £3bn and between £4bn and £7bn respectively.

 

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  • rate this
    0

    Comment number 830.

    809 Ciaran....I think you will find he is, it was announced in the last budget that tax loopholes will not only be closed but also powers introduced to backdate the change and recover monies, However Labour may force him into a u turn if Blair,Brown and Livingstone put enough pressure on him

  • rate this
    0

    Comment number 829.

    I've been telling people for a while that there must a lot of money and super rich out there. Great to see some confirmation.

  • rate this
    0

    Comment number 828.

    If businesses were established as Social Enterprise then each worker would be an owner and a profit taker. This would then disperse wealth more evenly amongst the population and there would be much less for the people who not need it and who seem to cheat by not paying tax.

  • rate this
    0

    Comment number 827.

    825.Blythkeith

    "It is indeed - a legal obligation."

    Not a moral and ethical one as well?

  • rate this
    +5

    Comment number 826.

    The governments are puppets and have known about the hidden wealth of the super-rich since before any of us were born. Nothing will change. Certainly not down our end of the economic spectrum.

  • rate this
    -1

    Comment number 825.

    "Is it not an obligation?"

    It is indeed - a legal obligation.

  • rate this
    -5

    Comment number 824.

    Anyone can become very wealthy from almost nothing. Follow the story of George Soros, a refugee from Hungary who made a good start in London, funding himself at the LSE but later moving to the US with its better climate for his ambitions. Now he's a multi-billionaire. Dedication, hard work, keeping your eye on the ball as they say...

  • rate this
    +5

    Comment number 823.

    The alternative is not Socialism but efficient Capitalism. Unfortunately, Financialism has been mistaken for Capitalism and has done serious damage to it. Instead of real wealth being generated, false figures of wealth have been generated and this has allowed one man to be paid 100 times another when 100 times of real wealth has not been generated.

  • rate this
    +2

    Comment number 822.

    There was a time when the BBC would have had investigative reporters,
    putting this together for Panorama.
    Those days are long gone.
    When is the BBC going to report the real news?

  • rate this
    0

    Comment number 821.

    801. killcrash No! Your a tax avoider if you have the fags and booze and manage to find away of paying only 1% tax on them! What can you do given the limitations of human beings? There was a politician who said his greates acheivement was no kids without shoes when he left power. He devalued and was vilified. The "pound in your pocket" stuff was incorrect. he died of a mystereous illness.Be afraid

  • rate this
    +6

    Comment number 820.

    Think about it.What type of person moves money to another country to avoid paying taxes and thus avoid helping his or her fellow citizens?
    Selfish? Greedy? Untrustworthy? Uncaring?
    Yet we seem to accept this as normal behaviour when businesses do the very same thing.
    I think that a person who is not working for the good of their own country and people are traitors and should hold no citizenship

  • rate this
    -64

    Comment number 819.

    If you were very rich, would you willingly pay tax?

    It is lamentable, but not surprising.

  • rate this
    -6

    Comment number 818.

    804.Marcia Rabin
    Over 50% of all tax receipts in the UK come from 10% of taxpayers...so take care on what you wish for!

    Irrespective of the ignorance of the envious: the UK would be a third world country if the wealthy that do contribute just decided to act on your suggestion. You might find that you are plunged into a hell rather than the other way round!!

  • rate this
    -7

    Comment number 817.

    We shouldn't complain about this, these people have given some of us jobs and therefore they should tax dodge /sarcasm

  • rate this
    +2

    Comment number 816.

    799. yam yzf
    5 MINUTES AGO
    Tax is a privilege, not a right & govt should remember that.

    --
    Is it not an obligation?

  • rate this
    +6

    Comment number 815.

    796. Dr_Ads
    "To people from Norway the U.K is a tax-haven, but I don't hear them complaining."

    Learn Norwegian then - they complain like nobody's business. Ironic you picked possibly the most egalitarian liberal democracy in the world, with an astounding quality of life to make the point of declaring there's "no such thing as a tax haven" followed immediately by it's very definition!

  • rate this
    +3

    Comment number 814.

    757. modusman Has it occurred to you yet that the people currently being slaughtered in Syria, are simply because a very rich elite want to continue plundering the country, and that people live in poverty in countries throughout the world, for much the same reason. Despots who channel the countries wealth into their own accounts, enabled by corrupt bankers and tax havens.

  • rate this
    +1

    Comment number 813.

    There is a great five minute video ""Corporations to the music of Handel' s Messiah. Just google Hallelujah corporations. Lyrics include 'we shall reign for ever' and 'screw the poor'. Light relief but also very telling.

  • rate this
    0

    Comment number 812.

    it wouldn't be half so depressing if it wasn't for the fact that the guilty one's are probably sitting in luxury somewhere totally oblivious while we are on the BBC website waiting for Songs of Praise to start..'All my hope on God is founded...'

  • rate this
    0

    Comment number 811.

    I am reading so many comments blaming the government.
    They all feed from the same trough.

 

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