The loss is equivalent to six times the estimated cost to getting every child in the world into school, and almost three times the cost of achieving universal primary health care. Revenue losses associated with tax havens, along with unsustainable debt, deteriorating terms of trade and declining aid, are crippling human development prospects in poor countries, the report says. Tax havens exist simply to help the wealthy thrive. This limits the ability of governments, especially in poor countries, to raise revenues and invest in social services. Poor countries have been forced to compete in a race to the bottom to offer foreign investors ever-lower tax rates.
Many tax havens provide sanctuary for the proceeds of crime and corruption.
Meanwhile, one in five Nigerian children die within five years of their birth due to the lack of basic health services. Tax havens are central to the operation of global financial markets, which have been defined by currency instability, and rapid surges and reversals of capital flows. Markets have globalised, the report says, allowing the movement of huge sums of money to tax regimes most favourable to rich companies and individuals, and yet tax structures remain largely national. The result is increased scope for tax avoidance and increasing pressure on government revenues. All industrialised countries now recognise the threats posed by tax havens, but their response has been inadequate.