Global Tax Evasion Report 2024

Why in news?

• European Union Tax Observatory released its ‘Global Tax Evasion Report 2024’.

About Tax Evasion

• Tax evasion is the illegal act of deliberately misrepresenting or underreporting income, inflating deductions, or engaging in other fraudulent activities to reduce the amount of taxes owed to the government.
• It is a criminal offense and a form of tax fraud. Tax evasion is typically done to evade paying the correct amount of income tax, corporate tax, or other taxes that individuals or businesses are legally obligated to pay.
• It is distinct from tax avoidance, which involves using legal means to minimize tax liabilities.

Key Findings

• $1 trillion profit shifted (in 2022) to tax havens, with negligible effects of policies like Base Erosion and Profit Shifting (BEPS, 2015).
• Global billionaires have low personal effective tax rates (between 0% and 0.5% of their wealth).
• Due to the Automatic exchange of bank information, offshore tax evasion has declined.

PRACTICE QUESTION:

Which among the following published Global Tax Evasion Report, 2024?

(a) World Bank

(b) European Union Tax Observatory

(c) New Development Bank

(d) International Monetary Fund

Answer