Tax havens and tax evasion costs governments, including Canada, the US and those in the developing world a substantial amount of revenue. Although it undermines Western governments these tax havens devastate the capacity of many Southern countries to provide basic services to their own people. At the upcoming G20 meeting financial regulation and stopping tax haven secrecy will be at the top of the agenda. If the US loses $100 billion in tax revenue every year from tax havens, then how much does Canada lose every year? Why not take the money currently lost and use it to increase grants and contributions to the Canadian charitable sector?
According to the Global Financial Integrity Project of the Center for International Policy:
Offshore tax abuse costs the United States $100 billion a year in uncollected tax revenue. Additionally, recent events such as the investigation of the Stanford Financial Group, the continuing legal battle between the Justice Department and Swiss bank UBS, and a December 2008 GAO report noting that 83 of the top 100 publicly traded U.S. companies have subsidiaries in tax havens underscore the need for strengthening anti-tax evasion law and increasing transparency in the global economic system.
According to Senator Levin when he introduced the act:
That’s why, today, I’m introducing the Stop Tax Haven Abuse Act, along with Senators Whitehouse, McCaskill and Bill Nelson, to stop tax cheats who drain our treasury of funds needed to pay for our recovery. The bill’s target is offshore tax abuses that rob the U.S. Treasury of an estimated $100 billion each year, reward tax dodgers using offshore secrecy laws to hide money from Uncle Sam, and offload the tax burden onto the backs of middle income families who play by the rules. http://levin.senate.gov/newsroom/release.cfm?id=308945
In the UK the charity organizations are suggesting some innovative uses of the funds collected by taxing tax haven funds:
For more information see:
The tax havens and secrecy jurisdictions being targeted in the Bill are: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dominica, Gibraltar, Grenada, Guernsey/Sark/Alderney, Hong Kong, Isle of Man, Jersey, Latvia, Liechtenstein, Luxembourg, Malta, Nauru, Netherlands Antilles, Panama, Samoa, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Singapore, Switzerland, Turks and Caicos, and Vanuatu.
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.