Tax research group says Am Samoa is losing taxes to the tune of $1.62M

Pago Pago, AMERICAN SAMOA — American Samoa’s tax lost each year to tax haven abuse is $1.62 million USD.

This is according to an international tax group called the Tax Justice Network (TJN), which was officially launched in the British Houses of Parliament in March 2003.

The TJN publishes pioneering research on the operation of tax and financial systems, their impact on society, equality and the economy, and the world of offshore tax abuse and financial secrecy.

According to TJN the world is losing over $427 billion (USD) in taxes a year to international tax abuse.

“Of the $427 billion, nearly $245 billion is lost to multinational corporations shifting profit into tax havens in order to under-report how much profit they actually made in the countries where they do business and consequently pay less tax than they should.

“The remaining $182 billion is lost to wealthy individuals hiding undeclared assets and incomes offshore, beyond the reach of the law.”

For American Samoa, the international tax group says “taxes lost each year to tax havens [is] $1,620,000 and that tax loss inflicted each year on other countries [is] $58,682,868.

“More taxes are lost to tax havens ever year due to corporate tax abuse by multinational corporations than due to private tax evasion by individuals.

“Multinational corporations short-change countries out of $245 billion in tax every year while people who move their wealth offshore short-change their governments out $182 billion less in tax every year.

“Higher income countries lose a lot more tax than lower income countries, but the impact of those tax losses are far greater on lower income countries’ public spending.

“Higher incomes countries’ tax losses are equal to 8 per cent of their public health budgets while lower incomes countries’ tax losses are equal to over half their public health budgets.”

Furthermore, almost all responsibility for global tax losses falls on higher income countries.

“Higher income countries were responsible for 98 per cent of all the tax loss countries around the world lost, whereas lower income countries were responsible for just 2 per cent.”

The TJN calls on governments to introduce an excess profit tax on the large multinational corporations whose profits have soared during the pandemic while local businesses were forced into lockdown.

“For the digital tech giants who claim to have our best interests at heart but have been short-changing us out of billions in tax for years, this could be their redemption tax. “Governments must introduce a wealth tax to reign in the billions in taxes lost to tax havens every year. 

“There has been an explosion in the asset values of the wealthiest since the pandemic began, even as unemployment has soared to record levels in many countries.

“A wealth tax would make sure that those with the broadest shoulders contribute as they should at this critical time.”

Also the TJN says that a global tax system that loses over $427 billion a year isn’t a broken system, it’s a system programmed to fail and governments must establish a U.N. tax convention that makes sure robust international tax standards are set in a transparent and democratic way.

TJN reports American Samoa vulnerability score is 65/100 with 100 being the worst and it states that Am Samoa is most vulnerable through imports.  The report says trading partners most responsible for vulnerability are Singapore, Nigeria and New Zealand.