The UN panel of former world leaders and central bank governors says $600 billion tax revenue lost annually
A United Nations panel has called for punitive actions against bankers, lawyers, and accountants who enable financial crimes, saying governments around the world can finance critical action on extreme poverty, COVID-19, and climate crisis by recovering billions of dollars lost through tax abuse, corruption, and money-laundering.
The panel of former world leaders and central bank governors, business and civil society heads, and academics said as much as 2.7 per cent of the global GDP is laundered annually, while corporations shopping around for tax-free jurisdictions cost governments up to $600 billion a year.
The High-Level Panel on International Financial Accountability, Transparency, and Integrity for Achieving the 2030 Agenda (FACTI Panel) called on governments to agree on a Global Pact for Financial Integrity for Sustainable Development.
In its full report, due for launch Thursday, the panel said stronger laws and institutions are needed to prevent corruption and money laundering, and recommended that “the bankers, lawyers, and accountants who enable financial crime must also face punitive sanctions.”
The report also called for greater transparency around company ownership and public spending, stronger international cooperation to prosecute bribery, international minimum corporate tax and the taxing of digital giants, and the global governance of tax abuse and money-laundering.
“A corrupt and failing financial system robs the poor and deprives the whole world of the resources needed to eradicate poverty, recover from COVID and tackle the climate crisis,” says Dalia Grybauskaitė, FACTI co-chair and former president of Lithuania, according to a statement sent to PREMIUM TIMES.
“Closing loopholes that allow money laundering, corruption, and tax abuse and stopping wrongdoing by bankers, accountants, and lawyers are steps in transforming the global economy for the universal good,” says Ibrahim Mayaki, FACTI co-chair and former prime minister of Niger.
The panel said at a time when billionaires’ wealth soared by 27.5 percent while 131 million people were pushed into poverty due to COVID-19, the report says that a tenth of the world’s wealth could be hidden in offshore financial assets, preventing governments from collecting their fair share of taxes.
Recovering the annual loss to tax avoidance and evasion in Bangladesh, for example, would allow the country to expand its social safety net to 9 million more elderly, in Chad it could pay for 38,000 classrooms, and in Germany, it could build 8000 wind turbines, the panel said.
The FACTI Panel was convened by the 74th president of the United Nations General Assembly and the 75th president of the Economic and Social Council on March 2, 2020.
The panel reviews financial accountability, transparency, and integrity, and makes evidence-based recommendations to close remaining gaps in the international system as a means to achieve the 2030 Agenda and the Sustainable Development Goals.