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Under pressure from corporate giants and the superrich, governments have programmed tax and financial systems to prioritise the wealthiest over everybody else, wiring financial secrecy and tax havens into the core of the global economy, says the Tax Justice Network (TJN).
The organisation released the 2025 edition of its annual State of Tax Justice report in November, again shedding light on the unethical practices that fuel inequality, foster corruption, and undermine democracy. Instead of using these systems to create a just society that prioritises the needs of all equally, says TJN, the wealthy get wealthier and the poor continue to struggle.
Over the six-year period (2016 to 2021) for which data is available, the latest report shows, US-headquartered multinational corporations cost countries around the world US$495-billion in lost corporate tax – considering the global total is around $1.7-trillion, this amounts to some 29% of that total.
“The US itself is the biggest loser to global corporate tax abuse, losing $US271-billion to its own multinationals.”
The tax lost is far more than the amount urgently needed for the $300-billion-per-year climate finance fund, intended to support developing nations, that countries committed to at COP29 in 2024. “Governments claim there isn’t enough money for climate action but as this report clearly shows, there is – it is in the wrong hands,” said Greenpeace International’s Political Unit Global Senior Policy Expert Nina Stros. “It is outrageous that people must bear the brunt of a crisis they didn’t cause while the wealthiest individuals and multinational corporations are allowed to pollute, hoard wealth and escape taxation.”
By curbing global tax abuse and minimally taxing the upper crust of extreme wealth of the superrich, TJN reported in a study published earlier in 2025, countries can raise the trillions needed to cover a wider range of estimates on countries’ climate finance needs with billions left over to spare on domestic needs.
One of the ways to help achieve this is by country-by-country reporting.
Global gag order
Country-by-country reporting is a solution that, if made obligatory, could have prevented around 28% of the corporate tax losses incurred because of multinational corporations using tax havens – this is shown by TJN’s latest modelling, based on behavioural changes seen among EU banks who were required to publicly disclose such reports in the past.
“Had governments not withheld from the public the reports they’ve collected from 2016 to 2021, US$474.6-billion of the US$1.7-trillion lost in corporate tax to tax havens over that period would have been collected. This revenue gain would have been the result of the deterrent effect alone with no additional effort or resourcing required from governments to recover the tax.”
Country-by-country reporting is a system introduced in 2015 whereby multinationals report separately on all the jurisdictions within which they operate, providing details of income, profit, taxes paid and economic activity for each jurisdiction.
By making these reports publicly available, this would act as a deterrent to tax abuse but, says TJN, “corporate lobbying successfully required the data to be anonymised after it is collected by governments and before it is made public. The standard barred any government from making the data public in any non-anonymised form. This in effect contorted the standard from a transparency measure into a global gag order.”
Anonymising the reports means the public can see how much corporate tax is being underpaid, says TJN, but they cannot identify the multinational culprits. With no transparency, there is no deterrence.
The US is a vehement opponent of fair taxation, with US president Donald Trump, upon starting his second term in office, declaring he would not accept attempts by any country to fairly tax the profits of US multinational corporations operating within that country’s jurisdiction.
Not surprising, then, that the US is both the biggest enabler and the biggest loser to lost corporate tax.
Moves to make global taxation equitable
The report, says TJN, reveals a “dramatic escalation in tax abuse by US multinational corporations set loose by Trump’s 2017 Tax Cuts and Jobs Act”. This is a key driver of the hundreds of billions of dollars in losses incurred.
US multinational corporations are now shifting twice as much profit out of the countries where they operate in and into the US, but are paying even less tax in the US than they were before Trump’s tax cuts were introduced, says the organisation, adding that “US multinationals did not bring their jobs stateside in return for the tax surrender”.
In June this year, the Compromiso de Sevilla outcome document from the fourth international conference on Financing for Development committed to strengthening “country-by-country reporting of multinational enterprises, when applicable, including further evaluating the creation of a central public database for country-by-country reports”.
The US did not make such a commitment.
Meanwhile, work continues on a world-first UN tax convention, agreed to in December 2023 as a push-back to the profoundly uneven existing global tax regime overseen by the global tax rules from the OECD – a small club of rich countries where this responsibility has sat for over 60 years. “Transparency measures to ensure fair access to information are part of the package, and countries can now more ambitiously commit to lift the global gag order fully, ensuring every member state – and their citizens – would benefit.”
The UN tax convention, said Stros, is a “historic chance to change the rules, make the richest polluters pay their fair share, and unlock trillions for climate action and sustainable development”.
