Difference between revisions of "The game: not paying tax"

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''There is a lot of tax avoidance around the world. Money goes to many different places and there are many layers of hiding it. Here are some of the ways people avoid paying tax around the world, showing who wins and who loses.''  
 
''There is a lot of tax avoidance around the world. Money goes to many different places and there are many layers of hiding it. Here are some of the ways people avoid paying tax around the world, showing who wins and who loses.''  
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http://www.google.com/maps/d/viewer?mid=1T4xntK59gBMnZ_AGG8_iLcSiXUM&ll=37.14698647670349%2C-1.9250767305493354&z=3
  
 
'''The United States - winner'''
 
'''The United States - winner'''

Revision as of 17:34, 28 December 2016

The game: not paying tax

There is a lot of tax avoidance around the world. Money goes to many different places and there are many layers of hiding it. Here are some of the ways people avoid paying tax around the world, showing who wins and who loses.

http://www.google.com/maps/d/viewer?mid=1T4xntK59gBMnZ_AGG8_iLcSiXUM&ll=37.14698647670349%2C-1.9250767305493354&z=3

The United States - winner

The US has been worried for a long time about money leaving the country. So they have set up a tax haven there. It has a very big finance industry and no tax at all on foreign money. So it attracts illegal money. It is easy to start an 'anonymous' company (no-one knows who the owner is) in some states eg. Delaware, Wyoming and Nevada, because they do not have strict laws.

Guatemala - loser

In 2013, Guatemala lost more than $2.5 billion, as this left the country illegally. This is about $1 billion more than all the public money spent on education.

Panama - winner

The famous law firm Mossack Fonseca is in Panama. Even with international pressure, Panama has not become less secret. It now has about 350,000 anonymous companies registered. And foreign companies can bring as much money as they want into the country without paying tax. After the Panama Papers scandal, they tried to improve this. But Nobel economist Joseph Stiglitz left the Panamanian government group because he said they were not open enough.

Ireland - winner

Ireland is famous for the ‘double Irish’: you can cut business tax a lot by 'transfer pricing'. So many big US technology companies, eg. Apple, Facebook and Google love it. But they had problems with the EU recently about Apple’s low tax bill, so there could be more problems in future for businesses who try to avoid tax.

British Virgin Islands - winner

There are 16 registered companies here for every citizen. The British Virgin Islands is one of the easiest places in the world to start an anonymous company. It is famous for not having strict laws, so it’s easy for people to hide behind other names.

The Cayman Islands - winner

The Cayman Islands are the sixth-biggest banking centre in the world, with over $1.4 trillion. There are more than 11,000 investment funds there, including nearly half of the world’s hedge funds. There are more US investments there than the whole Chinese economy. The secrecy laws are so tight that sometimes people go to prison only for asking for banking information.

Switzerland - winner

Switzerland still keeps a lot of money secrets. It is a favourite place for corrupt money from the developing world. There is probably about $2.3 trillion, about a third of all offshore wealth, in secretive Swiss private banks.

Luxembourg - winner

After Switzerland, Luxembourg is the biggest tax haven in Europe. Big transnational companies eg. PepsiCo and Walmart like because it does not have strict finance laws and has low business tax. Luxembourg manages $2.5 trillion of investment funds.

London - winner

Because of tax evasion in London, the price of houses is going up very quickly – rich people are buying houses as a way of not paying tax. London housing is a perfect place for illegal money because the housing market is good and there are low property taxes. The average home price is now 14 times the average income.

The City of London - winner

The City is at the centre of a very big network so it has to promote the interests of Big Finance around the world. It has special legal privileges to fight for ‘financial freedom’ and this gives a lot of business to ‘offshore’ areas.

Uganda - loser

Uganda has a new oil industry. There was a tax scandal in 2010: Heritage Oil and Gas (a company owned by British people) tried to move from the Bahamas to Mauritius so they didn’t have to pay $434 million when they sold a Ugandan oil field. After a long court battle, they gave part of the money back – they money was about a fifth of Uganda’s total annual tax.

Zambia - loser

Zambia has a lot of minerals. Mining companies there use ‘transfer-pricing’ to hide tax. The country loses $2-3 billion every year – this is business tax the companies should pay – about 10-15 per cent of GDP. 74 per cent of the population live on less than $1.25 per day, so that money would help schools and healthcare a lot. But it goes to people who own Glencore and Vedanta and others.

Russia - loser

About $200 billion, more than half of Russia’s money is hidden ‘offshore’ (outside the country, where no tax is paid). So the country loses $1 billion every year in tax. Politicians don’t like to pay tax. Many friends and relatives of very important people, including Vladimir Putin, have a lot of money offshore.

China - loser

China has many offshore services – at least $1 trillion of illegal money has left the country since 2001. The important people in China - including relatives of current president Xi Jinping – don’t want the tax authorities to find their money.

Hong Kong - winner

This is now an important place for people in Asian with money who don’t want to pay tax. Hong Kong has strict secrecy laws and relaxed money rules. A lot of people in China send ‘dirty money’ to Hong Kong, where they make it look like foreign money, and then invest it again in China.

NOW READ THE ORIGINAL – look at the map at the top and click on the different places: https://newint.org/features/2016/12/01/the-dissimulation-game/