Brazilian millionaires prefer tax havens

Brazilian millionaires prefer tax havens

Brazilian millionaires prefer placing their money in tax havens such as Panama, Switzerland, St. Vincent and the Grenadines and others, according to a recent investigation in which it was revealed that the amount of money deposited in offshore banks exceeded 520 billion dollars. With this, Brazil occupies fourth place in the list of countries with the largest amount of funds in offshore jurisdictions. In order to arrive at this multimillionaire amount, James Henry, an economist who worked previously for McKinsey consultants, investigated the data from the International Compensation Bank, the international Currency Fund, the World Bank, and in governmental public information. With this ample volume of numbers, he wrote a report entitled “The Price of Offshore Revisited”, which received wide coverage from the media. According to Henry, since the 70s of the last century up till now, the richest citizens of 139 countries have placed between 21 billion and 32 billion dollars, equal to the total economy of the United States and Japan together, in about 80 tax shelters. Almost a tenth of this money, some 2.05 billion, belongs to Latin Americans. Henry believes that the money located in tax havens represents an “enormous black hole in the global economy” and considers it “worrisome” that nations in the Latin American region such as Brazil, Mexico, Argentina, and Venezuela appear in the list of 20 countries that have the most money in offshore banks. Henry’s study was done under the patronage of the organization “Tax Justice Network”, dedicated to battling tax havens, causing some experts to feel that the economist’s views have been excessively biased. According to John Christensen, director of the sponsoring institution, the countries exporting mineral riches follow a pattern in their relations with tax havens and businessmen constantly receive requests from prestigious offshore banks to place their assets in these banks. Christensen added that mineral and oil exporters, pharmaceuticals, telecommunications and transportation are among the sectors most prone to using tax havens. “The financially elite worry a lot because others pay taxes, but they don’t like paying taxes. In Brazil’s case, when millionaires complain about high taxes, you can believe that they are lying, because they have been sending their money to tax havens for years,” the manager concludes. Other Latin American millionaires opt for placing their money in tax havens such as Granada, the British Virgin Islands or Montserrat. For example, the Chileans placed some 105 billion, equivalent to 122% of the country’s foreign debt. Following them are the Colombians, with 47.9 billion (76% of the sovereign foreign liabilities); the Panamanians, with 37.6 billion (330%); the Ecuadorians, with 21.6 billion (146%); the Bolivians, with 18.4 billion (349%); the Uruguayans, with 13.3 billion (103%); the Salvadorians, with 11.2 billion (110%); the Dominicans, with 10.2 billion (78%) and the Peruvians, with 8.1 billion (22%). If they had increased the income tax at 30% by approximately 3% annually on the undeclared 21 billion, the states of the world would have collected between 190 billion and 280 billion, according to the “Tax Justice Network”.

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