The “Suisse Secrets,” based on leaks from a Credit Suisse whistle blower, demonstrates yet again the need to crack down on global tax dodging and bank secrecy. But while the media hones in on stories of individual corruption, the much more significant scale of corporate tax abuse must not be forgotten.
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For decades, banks such as Credit Suisse have helped enable corporations and the mega rich to syphon billions of dollars of tax revenue out of public budgets and into offshore accounts. Meanwhile, frontline workers and unions have been told there simply is not enough wealth available to increase staffing levels or extend funding for public services. Tax dodging and offshore abuse has fuelled the push for austerity and privatisation across the world, leaving public services brutally unprepared for the covid pandemic.
Yet when Swiss Bank Accounts and “Illicit Financial Flows” are discussed, the stereotypical example tends to be a corrupt official from the third world hiding dirty money. This despite the fact that research has consistently shown the vast majority of Illicit Financial Flows are caused by shady corporate financial techniques such as trade mispricing and offshore tax avoidance. An African Union Panel found the continent was losing over $80 billion per year through illicit financial flows, the vast majority caused by multinational corporations, hampering development and fuelling inequality.
These latest revelations are significant, in that they expose how major western economies – including Switzerland, Netherlands, Ireland, UK and USA – help facilitate global tax abuse. Yet they are hardly surprising: in 2014 Credit Suisse plead guilty in a $2.6 Billion tax avoidance case. To put things in perspective, $2.6 billion could help fund the production of over 1 billion vaccine doses.
In 2018 the UN Independent Expert on foreign debt and human rights, Juan Pablo Bohoslavsky, said “there is still a need to strengthen the accountability, regulation and supervision of the Swiss financial market to prevent adverse human rights impacts caused by illicit financial flows and to prevent that funds of illicit origin be deposited in Switzerland in the first place.” Yet since then, little has changed.
PSI’s 2021 State Of Tax Justice report found that Switzerland inflicted $21billion of tax loses on other countries across the world. The country was responsible for over 5% of global tax havenry, despite representing just 0.1% of the global population.
PSI General Secretary Rosa Pavanelli said “The Suisse Secrets are a slap in the face for frontline workers who have to deal with the brutal consequences of public budget cuts exacerbated by tax dodging and offshore havens. It’s time for real change; which means of a minimum global corporate tax rate of 25% and a UN tax body to monitor capital flows.”