Tuesday 27th February 2024

 

The latest analysis by finance experts, RIFT, shows that the UK loses £22.5bn a year in tax to offshore wealth, second to only the United States. However, this lost tax income equates to less than 1% of the nation’s GDP, unlike the Marshall Islands, where offshore tax losses equate to 27% of the nation’s GDP.

RIFT analysed the latest data from the Tax Justice Network looking at the sums lost in tax to individuals as a result of offshore wealth around the world and what this lost tax equates to as a percentage of national GDP. 

The figures* show that an estimated £135.8bn in tax revenue is lost each and every year as a result of offshore wealth, or in layman’s terms, those utilising tax havens to dodge their tax contributions. 

Between them, the United States and United Kingdom account for 39% of the annual tax revenue lost to offshore wealth. It’s estimated that the United States alone loses over £30.1bn a year, while across the United Kingdom this equates to more than £22.5bn a year in lost tax revenue. 

Ireland ranks third in this respect, with over £10.4bn lost per year, followed by Germany (£7.9bn) and China (£7.9bn). 

While vast, the tax income lost to offshore wealth across the United States each year equates to just 0.1% of the nation’s GDP, climbing to 0.9% of GDP for the UK.

In fact, while total tax losses as a result of offshore wealth are lower in Ireland, the £10.4bn lost annually equates to 2.4% of the countries GDP - placing it in the top 10 in this respect (#10).

However, it’s the Marshall Islands that bears the worst economic brunt as a result of offshore tax dodging. The Pacific island nation loses an estimated £56.8m a year in tax revenue which equates to 27% of its national GDP.

Samoa (17%), Luxembourg (12%), Curacao (11%), Seychelles (8%), Liberia (4%), Belize (3%), Cyprus (3%) and St Vincent and Grenadines (3%) also rank within the top 10.