Global watchdog the Tax Justice Network (TJN) this week wrote an open letter to King Charles, urging him to clamp down on the country’s financial services jurisdictions which are often regarded as tax havens — jurisdictions where the wealthy hide money to evade taxes.
The UK, its Crown Dependencies, and the Overseas Territories are believed to be collectively responsible for facilitating nearly 40 per cent of the tax revenue losses that countries around the world suffer annually when multinational corporations and powerful individuals shelter their wealth in these countries.
The TJN says “this makes the UK and its network of satellite tax havens the world’s biggest enabler of global tax abuse.”
In the letter, the organization warned the King of the “heavy financial and human costs” inflicted on “ordinary people in the UK, the Commonwealth, and around the world” by the British tax havens over which King Charles is sovereign.
“Our latest estimates put the sum of this tax loss imposed upon the world by British tax havens at over US$189 billion a year, which is more than three times the humanitarian aid budget the UN requested for this year,” the open letter stated.
The letter also mentions research by the University of St Andrews and the University of Leicester which show that if the global tax losses caused by British tax havens were reversed, 12.6 million people would gain access to basic sanitation, and 1.2 million children would be able to attend school for an extra year.
Letter mentions BVI and trans-atlantic trade
The letter also mentions King Charles’ statements last year to the Commonwealth. In those statements, the monarch said we “must find new ways to acknowledge our past”. He also expressed His desire to deepen His understanding of the enduring impacts of slavery and other aspects of colonial violence and extraction.
“Rather than beginning to pay reparations for the violence, enslavement and extraction of the British empire, the UK’s ‘second empire’ is continuing to add to the debts that we owe. The scale of that debt is almost certainly unpayable. At a minimum, however, the time has surely come to stop the clock running,” the TJN said.
The organisation also wrote that “the British Virgin Islands, Cayman Islands, Bermuda and Jersey all rank above Ireland on the Corporate Tax Haven Index 2021, our ranking of jurisdictions most complicit in helping multinational corporations underpay corporate tax.”
With one of the biggest financial services industries in the world, the BVI has often come under fire as more countries call for the rich to stop hiding their money in offshore jurisdictions.
However, the Virgin Islands
continues to defend the industry which is its highest income earner. A recent report by UK-based research and consultancy firm, Pragmatix Advisory, found that investments mediated by BVI business companies support around 2.3 million jobs globally and generate an extra US$14 billion each year in taxes for governments worldwide.