Monday, July 23, 2012 -
Kazakhstan is one of the worst developing economies for capital flight, a report by an international consultancy firm said Saturday.
Kazakhstan has lost an estimated $168 billion to tax havens, while neighboring Russia has lost a staggering $798 billion, the report says. Both are among the top 20 developing states in terms of lost tax revenue.
The report – published by the Tax Justice Network campaign group – conducted new research to determine how much money is lost to tax havens and which countries are the worst offenders. The results were released to The Observer newspaper in Britain.
Uzbekistan has seen $23 billion in capital moved offshore, while Turkmenistan has lost 3.4 billion in capital flight. Tajikistan has lost $2.4 billion, and Kyrgyzstan has lost $1 billion, according to the report.
An estimated $21 trillion has been lost to tax havens. High-earning firms and individuals shift their assets to tax havens – among which are included Switzerland, the UK island of Jersey, Bermuda, and Singapore, to name a few – to avoid paying hefty taxes to their home governments.
Of this amount, $9.8 trillion is owned by 91,186 individuals.
The report is gleaned from information from the International Monetary Fund (IMF), the Bank for International Settlements (BIS), and several private sector analysts.
Other developing states losing significant amounts of tax revenue due to capital moved offshore are Mexico ($417 billion), Brazil ($520 billion), China ($1.189 billion), Saudi Arabia ($779 billion), and Kuwait ($496 billion).
Analysts at the Tax Justice Network estimate that this lost tax revenue is enough to solve the most pressing issues facing the world today.
“If we could figure out how to tax all this offshore wealth without killing the proverbial golden goose, or at least entice its owners to reinvest it back home, this sector of the global underground is easily large enough to make a significant contribution to tax justice, investment, and paying the costs of global problems like climate change,” James Henry, the principle author of the report who is a former chief economist at McKinsey Consultants, told The Observer.