{"id":198872,"date":"2017-09-14T17:02:14","date_gmt":"2017-09-14T15:02:14","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=198872"},"modified":"2017-09-15T15:37:15","modified_gmt":"2017-09-15T13:37:15","slug":"these-two-graphs-show-whos-evading-tax-and-how-much-money-theyre-stashing-offshore","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/wealth\/198872\/these-two-graphs-show-whos-evading-tax-and-how-much-money-theyre-stashing-offshore\/","title":{"rendered":"These 2 graphs show who’s evading tax – and how much money they’re stashing offshore"},"content":{"rendered":"

New research papers published by the National Bureau of Economic Research expose how the world’s wealthiest people are hiding their money – including those in South Africa.<\/p>\n

The research papers covered two specific areas, namely who owns all the money stored away in the world’s tax havens<\/a><\/strong>, and how this type of tax evasion is impacting inequality<\/a><\/strong>.<\/p>\n

The papers were based on a variety of data, including ICIJ’s Swiss Leaks and Panama Papers investigations.<\/p>\n

The main take away from the report is that there is a significant portion of wealth stored in offshore accounts, globally, and that it’s the super rich who using them.<\/p>\n

According to the researchers,\u00a0the equivalent of 10% of world GDP is estimated held in tax havens globally, but this average differs from place to place – a few percent of GDP in Scandinavia, to about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies.<\/p>\n

From the data reported from the Swiss banking system<\/a><\/strong>, added to wealth held in other tax havens, it is estimated that as much as the equivalent of 12% of South Africa’s GDP (approximately $35 billion) is held in tax havens.<\/p>\n

\"\"<\/a><\/p>\n

In the second research paper, the fingers point to a very specific group of people for the trend: the super wealthy.<\/p>\n

Here the researchers found that it was those whose net worth was over $45 million – the so-called 0.01% – who would be most likely to dodge taxes by stashing their wealth offshore, effectively snubbing their duty to pay about 30% of their personal income tax.<\/p>\n

Overall, it is only those in the top 5% of global earners who venture over the global average of tax evasion – with the proportion dodged only increasing as wealth gets larger.<\/p>\n

\"\"<\/a><\/p>\n

According to the International Consortium of Investigative Journalism, the research papers also point to other trends among the use of tax havens among the world’s richest people.<\/p>\n

These include that hardly any other group outside the super rich make use of offshore tax havens, and that countries that follow these trends also have higher rates of inequality.<\/p>\n

A South African perspective<\/strong><\/p>\n

Tax evasion was a hot topic this past week, with many speakers at the Tax Indaba held in Sandton<\/a><\/strong> on Monday pointing to a growing tax problem in South Africa.<\/p>\n

Economists and analysts pointed to a decline in tax compliance in the country, which was widening an already significant revenue gap in the fiscus.<\/p>\n

Finance minister Malusi Gigaba is facing an unenviable position of having to find ways to fill a R50 billion tax hole, on top of the R30 billion gap seen at the time of the country’s budget speech in February.<\/p>\n

Speakers from National Treasury said they faced a dilemma, where missed tax revenue targets would force Treasury to look at other avenues to draw in money.<\/p>\n

This presented a dilemma: reducing spending (like cutting government\u2019s wage bill for example) would simply put growth and tax revenues under pressure \u2013 but alternatives like hiking taxes would push people to look for loopholes and other tax evasion techniques, leading to the same result.<\/p>\n

Gigaba\u00a0conceded that tax collection problems in South Africa were directly related to corruption and wasteful expenditure, but appealed to businesses and wealthy individuals to also pay their fair share, and not use \u201coptions available to them\u201d to avoid paying tax.<\/p>\n

\u201cWe should not have a situation where individuals who can afford to pay for advisors or complicated structures end up paying less tax than those who cannot afford such services,\u201d he said.<\/p>\n

\n

Read:\u00a0The consequences of scrapping tax exemptions on income earned outside SA<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

New research papers published by the National Bureau of Economic Research expose how the world’s wealthiest people are hiding their money – including those in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":104297,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121,9880],"tags":[],"class_list":["post-198872","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-wealth"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/198872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=198872"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/198872\/revisions"}],"predecessor-version":[{"id":199168,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/198872\/revisions\/199168"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/104297"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=198872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=198872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=198872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}