Governments of countries offering tax-free jurisdictions for companies are losing as much as $600 billion annually.
This is according to a High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) of the United Nations (UN).
According to the Panel, governments can finance critical actions on extreme poverty, COVID-19 and the climate crisis and by recovering the billions of dollars lost through operations of companies in such jurisdictions, tax abuse, corruption and money-laundering.
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Adding that, as much as 2.7 percent of the global GDP is laundered annually.
In its report, Financial Integrity for Sustainable Development, the FACTI Panel says stronger laws and institutions are needed to prevent corruption and money laundering, and that the bankers, lawyers and accountants who enable financial crime must also face punitive sanctions.
The report also calls 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 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.
“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 during the launch of its report, called on governments to agree to a Global Pact for Financial Integrity for Sustainable Development.
The High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTIPanel) was convened by the 74th President of the United Nations General Assembly and the 75th President of the Economic and Social Council on 2 March 2020.
The FACTI 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.