Worldwide inequality partly due to tax evasion via the Netherlands
Tax evasion through the Netherlands is playing a significant part in the widening inequality gap between the rich and the poor around the world, according to a report by Oxfam Novib.
The inequality gap widens
According to the “Time to Care” report by Oxfam Novib, inequality between the rich and the poor continues to increase worldwide. It might come as a surprise that the 22 richest men in the world collectively own more than all the women in Africa. In fact, the world's billionaires, all 2.153 of them, are collectively richer than 4,6 billion people. Furthermore, the richest one percent of people on Earth have more than twice as much wealth as 6,9 billion people.
Fortunately, thanks to the effort of people and organisations around the world, the number of people living in extreme poverty is falling. Despite this, inequality is still increasing and a big part of it is down to tax. According to the report, only 4 percent of global tax comes from the taxation of wealth and the “super-rich” avoid as much as 30 percent of their tax liability. This denies governments billions of dollars that could be spent on services to help reduce inequality, such as healthcare and education.
Tax evasion through the Netherlands
It is common practice for large multinationals to divert their profits around the world to avoid paying taxes. According to international research, ten percent of the profits made by international companies end up in the Netherlands, unsurprising given the country’s status as a tax haven. “Our country must now really eliminate tax avoidance,” stated Michiel Servaes, director of Oxfam Novib.
Unpaid care-work a factor in inequality
Oxfam Novib is a Dutch co-financing and non-governmental organisation focusing on development cooperation and is part of the international charity Oxfam. Oxfam Novib aims to fight poverty and champion equal rights. In their report, the organisation specifies unpaid care-work as one of the “hidden engines used by a system that allows profits to flow away to large companies and their shareholders.”
Essentially, women and children in poor countries are often expected to spend their time cooking, cleaning and caring for children and the elderly, usually as unpaid work. This system results in women and children unable to attend school or get a paid job. Furthermore, these women and children support the economy with their cheap and free labour as well as allowing the state to benefit by providing care that should be provided by the public sector.