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Ottawa (02 Dec. 2021) — The State of Tax Justice 2021, a report from the Tax Justice Network shows how tax dodging by large corporations and the wealthy is interfering with the recovery from COVID-19 pandemic. According to the report, the amount countries are losing to tax abuse by multinational corporations and the wealthy is enough to vaccinate everyone in the world against the COVID-19 more than 3 times over — and this is with the unfair prices for vaccines lower income countries are being asked to pay.
As the first cases of the omicron variant of COVID-19 are reported in Canada, it is incredibly frustrating to realize that without tax dodging by large corporations and the wealthy, the money would have been there to vaccinate everyone in the world and we’d be a lot closer to bringing the pandemic under control.
Tax Justice Network estimate of losses from tax dodging low
The Tax Justice Network makes it clear that its estimates are on the low end. This is because it is only possible to get accurate country by country figures for losses due to tax dodging for direct losses. If indirect losses were included, total losses due to tax abuse would be over US$1 trillion.
Tax justice or austerity
Pressure is already being put on governments across Canada to adopt austerity policies as Canada recovers from the pandemic. We already know that, because federal government funding covered 86% of COVID-19 pandemic costs, provincial governments are in far better shape than they are admitting.
What The State of Tax Justice 2021 and other similar reports show is that, should more be needed, there is an alternative to austerity. It also shows that governments have the ability to curb tax dodging. Among the recommendations in the report are an excess profits tax and a wealth tax — both measures that could be implemented by the Canadian government.
Lower-income countries losing money need to deal with the pandemic and climate change
While higher income countries are losing more in dollar terms, as a percent of spending, what low-income countries are losing is far higher. It’s estimated that what lower-income countries lost due to tax dodging by multinational corporations and the wealthy is equivalent to 48% of their public health budgets.
That isn’t just hurting people in lower-income countries. The COVID-19 pandemic and emissions causing climate change don’t respect national boundaries. That means Canadians are affected by whether other countries have the resources to deal with the pandemic or reduce emissions causing climate change.
Canada has the ability to help other countries fight tax dodging
While Canadians are hurt by tax dodging in lower-income countries, Canada is also contributing to the problem. The report shows that Canada is the 10th largest contributor to the global problem of tax havens and financial secrecy. Canada is responsible for 3.87% of the global tax loss — that’s comparable to notorious tax havens like Switzerland and Ireland and higher than other notorious tax havens Bermuda, Jersey or the Isle of Man.
This means that by dealing with weaknesses in Canadian laws, like the secrecy around companies registered in Canada, we can help lower-income countries trying to deal with tax dodging. And when we are facing problems that don’t respect national boundaries, that also helps Canadians.