The research, carried out by Columbia University professor James S Henry, named several countries that have been hit by a number of high-profile corruption scandals in recent years.
Malaysia, Thailand and Indonesia have been described as some of the worst affected countries, while a significant amount of money in offshore tax havens has been transferred from oil-rich nations including Nigeria and Angola.
China
The figures, compiled using data from the International Monetary Fund and the United Nations, also found that Chinese citizens, including from international finance centres such as Hong Kong and Macau, have siphoned off $1.2tn into offshore accounts.
The findings come in the wake of last month’s Panama Papers leak, where more than 11 million documents uncovered how politicians, sports stars and financial institutions from around the world use offshore shell companies to avoid paying tax.
They also mirror UN data which estimates that tax dodging by the top 50 multinational companies in the US costs developing countries colossal $100bn every year.
Secrecy
Speaking to The Guardian, Henry revealed criminals and government officials in developing countries are making prolific use of offshore centres, not just for tax evasion, but also to secure secrecy and stop money from being confiscated back home – often using accounts that provide little financial returns.
Unsurprisingly, Brazil and Argentina – countries where leaders are regularly accused of money laundering and corruption – also feature heavily on the list.
Corruption summit and the economists’ letter
The research coincides with a letter, written by more than 300 of the world’s most prominent economists and published ahead of the UK government’s Anti-Corruption Summit in London on 12 May, urging world leaders to end the secrecy of offshore tax havens.
The note, signed by Nobel prize-winner Angus Deaton and best-selling author Thomas Piketty, described offshore centres such as the British Virgin Islands and Isle of Man as holding “no economic justification” instead undermining a countries’ ability to collect taxes – with poor countries proportionally the biggest losers.
The conference, which aims to step up global action to expose, punish and drive out corruption will be attended by politicians from 40 countries as well as World Bank and IMF representatives.
The TJN is called on those attending to further crackdown on the banks, lawyers and other professionals who facilitate financial secrecy.
Tax transparency
The think-thank is also urging politicians to publish their tax affairs as British prime minister David Cameron did last month amid mounting criticism after he admitted to pocketing £30,000 from a Bahama-based offshore fund set up by his late father.
