In its report, “An Economy for the 1%”, published ahead of the World Economic Forum in Davos, Oxfam has challenged world leaders to commit to a more effective approach to ending tax havens and harmful tax regimes.
The richest 1% now have more wealth than the rest of the world combined. The 62 richest individuals on the planet collectively have the same wealth as the “bottom half” of the world’s population (3.6 billion people).
As recently as 2010 the richest 388 people held half of the world’s assets, highlighting the speed at which wealth has concentrated in very few hands.
The charity has called on all governments – including developing countries – to create a global tax body with the objective of ensuring that national tax systems do not have negative global impacts.
While the report strongly targets corporate tax avoidance; wealth management is also firmly in its sights.
According to the report, the majority of offshore wealth is managed by just 50 banks, and the 10 busiest banks manage 40% of money and assets held offshore.
It is estimated that 8% of individual financial wealth sits offshore, equating to $7.6trn (£5.3trn, €7trn). If tax was paid on that wealth, it could generate an extra $190bn each year.
It is estimated that as much as 30% of all African financial wealth is held offshore, costing an estimated $14bn in tax revenue each year. Across Africa, Asia, and Latin America the amount of wealth sitting in tax havens is estimated at $70bn.
Oxfam writes that the existence of tax havens allows income and wealth to flow offshore, untaxed, and in secret – a legal means created for the rich to stay rich and to prevent essential redistribution that would reduce inequality and benefit society overall.