Every year, the world’s economies lose billions of dollars to tax avoidance. Estimates of the sheer scale of the losses fluctuate wildly with the IMF reporting that around $600 billion is lost due to profit shifting every year. A new paper published by UNU-WIDER took a closer look at the issue at country level, finding that the United States loses the highest amount in absolute terms by far.Every year, the U.S. loses an estimated $189 in tax, around 1.13 percent of GDP. China has the second highest annual losses in absolute terms with $66.8 billion while Japan is also badly effected with $47 billion unaccounted for.
India is not far in the list and looses more than 2% of GDP annually to tax avoidance. The cost of avoidance looks more stark when we consider that India is a developing economy and higher revenues with govt can deliver more bang for the buck than when the economy is developed
