Taxation is the Key to Ending Poverty

May 23, 2013 International Tax CooperationOffshore TaxationTax Havens

Maslakh Camp for Displaced, AfghanistanBRUSSELS – Taxing all of the hidden wealth and assets of the world could raise enough extra money to easily solve the global problem of poverty.

The world’s poverty problems could be solved entirely, if taxes were applied to capital and assets hidden away across the tax havens of the world, according to the results of new research released on May 22nd by the international aid organisation Oxfam.

According to estimates prepared by Oxfam approximately USD 18.5 trillion worth of assets in capitals is currently stashed away in offshore jurisdictions, with approximately USD 12 trillion being held in EU tax havens, such as Luxembourg, Andorra or Malta.

Oxfam estimates that if the hidden assets were to be taxed at only 3.5 percent, then over USD 156 billion in extra tax revenues could be raised each year.

The raised funds would be enough to ensure that each person in the world could be given a minimum income of at least USD 1.25 per day, which is estimated to be enough to lift an individual out of extreme poverty.

The research conducted by Oxfam suggest that the cost of funding the poverty reduction would only be USD 66 billion per year, and that taxing the hidden assets would raise enough funds to pay for the income rise twice over.

Photo by United Nations Photo