India is losing over 10.3 billion dollars which is about 75,000 crores in taxes every year. This loss is due to global tax abuse by multinational companies and tax evasion by private individuals.
According to the State of Tax Justice report, globally countries are losing a total of over 427 billion dollars in taxes each year to international corporate tax abuse and private tax evasion. This is costing countries almost the equivalent of the annual salaries of nearly 34 million nurses every year. Or we can say one nurse’s annual salary every second.
If we look at the data from India, the report says that there is a loss of 10.3 billion dollars, or 0.41 percent of the 3 trillion dollars GDP in taxes every year because of global tax abuse.
Out of this, over 10 billion dollars is lost to tax abuse by multinational corporations and 200 million dollars due to tax evasion committed by private individuals.
India Is Most Vulnerable To Illicit Financial Flows In Form Of Outward FDI
The social impact of the tax loss is equivalent to 44.7 percent of the health budget. And 10.68 percent of education spending. The loss also equals paying yearly salaries of over 42.30 lakh nurses.
Furthermore, India is most vulnerable to illicit financial flows in the form of outward FDI. And it has listed Singapore, Mauritius, and the Netherlands as the trading partners which are most responsible for this vulnerability.
The State of Tax Justice report is published by the Tax Justice Network, in liaison with global union federation Public Services International and also the Global Alliance for Tax Justice. The report highlights the state of global tax abuse and governments’ efforts around the world to tackle tax menace.
The Tax Justice Network works as an independent international network. It launched in the year 2003 to focus on research, analysis, and advocacy in the area of international tax and financial regulation, which also includes the role of tax havens. The network maps, analyses and explains the impacts of tax evasion, tax avoidance, and tax competition. And it also supports the engagement of citizens, civil society organizations, and policymakers with the aim of a more just tax system.
The main aim of the network is :
- Eliminating cross-border tax evasion and limit tax avoidance
- Increasing the influence of citizens in the democratic control of taxation
- Restoration of similar tax treatment in different forms of income
- Removing the tax and secrecy incentives
- Promoting the role of tax and related legislation in supporting inclusive economic development