Tax Injustice – the facts

The measure of just tax is the ability to pay. The world’s tax system today is unjust, shifting the burden from rich to poor – and failing altogether to address the green agenda.

Race to the bottom1

Tax havens are now the first port of call for transnational corporations and rich individuals seeking tax-free wealth. The more havens there are, the more they compete to offer the least tax and attract the most cash. They are no longer just ‘offshore’ but include financial centres like Wall Street and the City of London – the world itself is becoming a tax haven.

There is no single definition of a ‘tax haven’. The countries and territories listed here can provide – at a price – secrecy and low or zero taxes.

Members of the Organization for Economic Co-operation and Development (OECD) – the ‘rich country club’ – with potentially ‘harmful’ tax regimes as defined by the OECD itself in 2000.

Tax havens

1. Andorra
2. Anguilla
3. Antigua & Barbuda
4. Aruba
5. Australia
6. Austria

7. Bahamas
8. Bahrain
9. Barbados
10. Belgium
11. Belize
12. Bermuda
13. British Virgin Islands
14. Canada
15. Cayman Islands
16. Cook Islands
17. Costa Rica
18. Cyprus
19. Dominica
20. Dubai
21. Finland (Åland)
22. France
23. Germany (Frankfurt)

24. Gibraltar
25. Greece
26. Grenada
27. Guernsey, Sark & Alderney
28. Hong Kong
29. Hungary
30. Iceland
31. Ireland

32. Isle of Man
33. Israel (Tel Aviv)
34. Italy (Campione d’Italia & Trieste)
35. Jersey
36. Korea (South)
37. Latvia
38. Lebanon
39. Liberia
40. Liechtenstein
41. Luxembourg
42. Macao
43. Malaysia (Labuan)
44. Maldives
45. Malta
46. Marshall Islands
47. Mauritius
48. Monaco
49. Montserrat
50. Nauru
51. Netherlands
52. Netherlands Antilles
53. Niue
54. N Mariana Islands
55. Palau
56. Panama
57. Portugal (Madeira)
58. Russia (Ingushetia)
59. Saint Kitts & Nevis
60. Saint Lucia
61. Saint Vincent & the Grenadines
62. Samoa
63. San Marino
64. São Tomé e Principe
65. Seychelles
66. Singapore
67. Somalia
68. South Africa
69. Spain (Melilla)
70. Sweden
71. Switzerland

72. Taiwan (Taipei)
73. Tonga
74. Turkey (Istanbul)
75. Turkish Rep. of Northern Cyprus
76. Turks & Caicos Islands
77. UK (City of London)
78. Uruguay
79. US Virgin Islands
80. US (New York)
81. Vanuatu


Pamper the powerful

Corporate tax rates have been falling everywhere, though least in Latin America and the Caribbean. The highest rates are still in the richest G7 countries, where they have also fallen the furthest.

Corporate Income Tax rates, 1993-2006 2


Penalize the poor

Everywhere the percentage of government revenues that comes from ‘indirect’ tax (on goods and services) has been increasing. Such taxes account for a much larger proportion of the income of poor people, who must spend more of it on goods and services than rich people.

Trends in indirect taxes on domestic goods and services (Revenues as a percentage of GDP) 2


Reward the rich

In no region is the average top rate of (direct) personal income tax now over 50%, as it was in the rich G7 and European Union as recently as 1995. Everywhere it has been falling. It remains lowest in the poorest regions, which are also often the most unequal.

Top Personal Income Tax Rates, 1995-2004 (per cent) 2


Drain the South

The flow of cash from poor to rich, South to North, Majority to Minority World is relentless. It is now also largely undocumented and untaxed. Illicit outflows, at perhaps $600 billion a year, are seven times greater than inflows of aid and double the total of foreign direct investment.

South/North financial flows3 Average per year 2002-06 ($ billions)


Don’t go green

Rich countries do the most environmental damage. Yet between 1994 and 2003 green taxes declined in 17 out of 30 rich OECD member countries. In Greece they almost halved. Only in Turkey did they exceed 5% of GDP in 2003. At the very bottom is the US, where they declined from slightly more to slightly less than 1%. For all OECD countries, the average in 2003 was less than 2% – and less than it was in 1994.

Tax revenues from environmentally related taxes as a percentage of GDP: OCED countries, 1994 and 2003 2
  1. Tax Justice Network, Identifying Tax Havens and Offshore Finance Centres, 2007,
  2. John Norregaard and Tehmina S Khan, Tax Policy: recent trends and coming challenges, IMF Working Paper WP/07/274, December 2007.
  3. Capital flight diverts development finance, Eurodad fact sheet 2007,