‘Political battle’ needed to combat tax havens, Ecuador tells UN | world-news | Hindustan Times
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‘Political battle’ needed to combat tax havens, Ecuador tells UN

world Updated: Sep 24, 2016 10:16 IST
offshore banking

Ecuador's foreign affairs minister Guillaume Long addresses the United Nations General Assembly in New York on Friday. (Reuters)

A political battle should be waged to bring tax havens into the light and allow governments to receive revenue currently lost in offshore accounts, Ecuador’s foreign minister Guillaume Long told the United Nations General Assembly on Friday.

Trillion of dollars according to some estimates are sloshing around the world’s shadowy offshore havens, money that would otherwise be available to improve government finances and, if spent wisely, benefit their populations.

Ecuador estimates that an amount equal to 30% of its gross domestic product is hidden from government oversight in tax havens, Long said.

“To put an end to tax havens, to have these critical resources for our development, we have to wage a political battle,” he said.

Long went on to call for establishment of an intergovernmental body within the United Nations.

“It’s time for the UN to take a much stronger stance against tax dodging in general, tax havens in particular and in favor of the broad issue of tax justice,” Long said in an interview earlier in the day.

A huge leak of documents from the Panama-based law firm Mossack Fonseca this year showed how offshore firms are used to stash the wealth of the rich and powerful, embarrassing several world leaders.

Read: Panama says tax evasion ‘not a crime’ there, offers to help India

In February, Ecuador will hold what it says is the world’s first public referendum asking voters if they want to prohibit public servants, including elected officials, from holding money in tax havens.

“The consequences of this are huge in terms of positioning the fight against a practice that is really shameful for humanity in the 20th century,” Long said in the interview.

As incoming president of the G-77 group of nations, Ecuador plans to push it’s anti-tax haven agenda.

Other countries have taken stabs at the same problem. In April, for example, Germany unveiled a plan that would create an international network of registers that list the actual owners of companies.

For Long, having an amount equivalent to one-third of the developing country’s economy hidden is an aberration.

“Imagine the economic progress that could have been made, how much poverty could have been reduced, how we could have reduced inequality if taxes had been paid and this money would have been invested in our country,” he told the General Assembly.