Pure Simango, Staff Writer 
ZIMBABWE is losing over US$106 million in duty revenue annually due to cross-border tax abuse by multinational companies and individuals hiding assets and income streams offshore, a State of Tax Justice report has revealed.
According to the recently launched report by the United Kingdom-based Tax Justice Network, the Global Alliance for Tax Justice and the Global Union Federation Public Services International — from the total amount the southern African country lost, US$64,5 million was due to corporate fraud, while over US$42 million was lost through hidden offshore wealth.
“Multinational companies are responsible for around a third of global economic output, half of world exports and a quarter of global employment.
“Their tax abuse is a first-order global economic issue, depriving governments of revenues, increasing inequalities between and within countries, and undermining smaller and domestic businesses that generate the majority of employment,” the report said.
The report further revealed that the world was losing US$171 billion a year to offshore tax evasion related to financial wealth alone, while US$312 billion is being lost to cross-border corporate tax abuse by multinational corporations.
“Even at the unfair prevailing prices of vaccines, however, the tax lost in a single year to cross-border tax abuse would have covered the cost of fully vaccinating the world’s entire population more than three times over,” the report said.
The tax justice report also said while lower income countries lose less tax, their overall losses represent a far larger share of the money they have to spend.
“Natural resources are extracted far beyond the levels that would be consistent with planetary sustainability, with companies often even benefiting from tax subsidies.
“National wealth is extracted, too, and very often without a corresponding national benefit — including through pervasive bribery and corporate tax abuse in the sector,” the report said.
The illicit financial flows that result from failures of transparency and tax rules constitute a first order, global economic problem, according to the report.
“The same financial secrecy that facilitates cross-border tax abuse by multinationals and wealthy individuals also provides the conditions for the laundering of the proceeds of crime including the trafficking of drugs and of people, and for bribery and other commercial criminal activity and for other forms of corruption.
“The continuing failure to challenge illicit financial flows — or even to recognise them as a major threat — has undermined human rights around the world for decades,” the report said.
The report further said that between countries, the failures of international tax rules were also exacerbating inequalities.
Experts have previously said Zimbabwe is losing millions to tax revenues, due to poor border management systems, tax evasion and smuggling of goods.
The Zimbabwe Revenue Authority is currently working on plugging revenue leakages through carrying out risk-based audits with assistance from tax inspectors, as well as intensifying intelligence on business activities.
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