Global distribution of revenue loss from corporate tax avoidance: re‐estimation and country results

Abstract

Abstract:International corporate tax is an important source of government revenue, especially in lower-income countries. An innovative study of the scale of this problem was carried out by International Monetary Fund researchers and published in 2016. We first re-estimate their model and then explore the effects of introducing higher-quality revenue data from the International Centre

Closing the Divide in Malawi: How to reduce inequality and increase prosperity for all

“…While it is difficult to know exactly how much is being lost this way because these flows are difficult to capture, current best estimates stand at $90m for 2013, or 2% of GDP. 34 Repatriating these revenues depends largely on the adoption of policies by the Government of Malawi, as well as bilateral negotiations with some foreign governments to ensure that companies publish financial reports of their operations in Malawi, alongside coordinated global action on tax dodging.…”

“…Estimates from a recent report show that the current estimate stands at $90m for 2013, equivalent to over 2% of GDP. 189 Repatriating tax revenues from artificial profit-shifting depends on the Government of Malawi as well as the international tax system and bilateral negotiations with some foreign governments -often also donors to Malawi -to adopt policies that ensure companies publish financial reports of their operations in Malawi, to enable the government and citizens to see how much profit they make and how much tax they pay. Those foreign governments need to establish public registers of the owners of financial wealth using their financial institutions, and share that information with the Malawian government so its tax authorities can collect taxes from wealth made in Malawi and end tax evasion.…”

International Aspects of Corporate Income Taxes and Associated Distortions

“…As shown in Figure 6, though there is an annual fluctuation, on average in the OECD governments raise around 10% of their total tax revenue from CIT, which is approximately 3% of GDP [44]. CIT accounts for a larger share of total tax revenues on average in lower-income countries than in high-income countries [6].…”

“…The topic is of high relevance since tax avoidance and evasion through base erosion and profit shifting continue unabated for some time and may be on the rise due to the ever more sophisticated tax-reducing techniques used by multinationals and increasingly mobile individuals [6][7][8][9][10].…”

Lost Revenues in Low Income Countries

“…19 This $627 million resource loss is nearly twice the combined education and health budget. 20 Informal sector…”