$18 trillion unaccounted money stashed in tax havens'

Business

oi-Staff

By Super

Updated: Saturday, January 24, 2015, 12:09 [IST]

A staggering USD 18 trillion worth unaccounted money is stashed in tax havens and ploughing back that amount into the global economy can help lift people from poverty, says Oxfam.

The estimate from the UK-based development organisation comes at a time when countries worldwide, including India, are making efforts to crack down on the menace of black money.

Participating in a session at the World Economic Forum (WEF) annual meet, Oxfam International's Executive Director Winnie Byanyima stressed on the need for global tax reforms.

"Oxfam estimates that there is USD 18 trillion stashed out in tax havens that has not been taxed. That is money that can be ploughed back into the economy to create jobs and give opportunity to poor people to lift themselves from poverty," she said.

She also stressed the need for fixing the tax system in order to reduce "tax dodging".
Byanyima, who is also the co-Chair of this year's WEF annual meet, acknowledged that the rich are producers of great wealth and said, "extreme wealth takes over the role of public decision-making".

In 2013, business in the US alone spent USD 400 million for lobbying with political decision-makers to shape the market in their favour even as many thousands in the developing world die of Ebola and malaria, Byanyima said.

"Let the companies stop lobbying and put the money into medicine," she suggested.
Byanyima was speaking at a panel debate examining global economic growth, inequality and the role of technology.

International Monetary Fund (IMF) Managing Director Christine Lagarde said that excessive inequality is not good for sustainable growth.

She also noted that inequality had worsened since the financial crisis.
"Distribution per se matters... if you increase the income share of the poorest it has a multiplying effect on growth," she said.

During the session, US-based Alcoa's Chairman and CEO Klaus Kleinfeld said the share of the world living in poverty had shrunk from 72 per cent in 1950 to 14.5 per cent in 2011 due to wealth created by industrialisation and globalisation.

Bank of England Governor Mark J Carney, said that inequality is increasing dramatically in virtually every emerging market and"equality of opportunity" is a key factor in reducing poverty.

Meanwhile, striking a cautious note on quantitative easing, UK-based WPP's CEO Sir Martin Sorrell "cheap money has driven asset appreciation since 2008", while structural reforms remain untackled.

Yale University's Sterling Professor of Economics Robert J Shiller also participated in the session.

PTI