Rich individuals and their families have as much as $32 trillion of hidden financial assets in offshore tax havens, according to research published on Sunday.
This is equivalent of the combined GDP of the US and Japan and represents a whopping $280 billion in lost income tax revenues, the study added.
The study estimates the extent of global private financial wealth held in offshore accounts — excluding non-financial assets such as real estate, gold, yachts and racehorses. It put the sum of global private wealth held offshore at between $21 and $32 trillion.
The research was carried out for pressure group Tax Justice Network, which campaigns against tax havens. James Henry, former chief economist at the consultancy firm McKinsey & Co, was the individual responsible for compiling the report.
To prepare this report, he used data from the World Bank, International Monetary Fund (IMF), United Nations (UN) and central banks.
The report also highlights the impact on the balance sheets of 139 developing countries of money held in tax havens by private elite, putting wealth beyond the reach of local tax authorities.
The research estimates that between 1970 and 2010, the richest citizens of these 139 countries had amassed $7.3 to $9.3 trillion of “unrecorded offshore wealth”.
Private wealth held offshore represents “a huge black hole in the world economy,” James Henry said in a statement.
According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4 trillion in 2010, a sharp rise from the £1.5 trillion five years ago, The Observer reported.