Global financial systems and tax avoidance

This chapter examines global financial systems and tax avoidance. It argues that the global financial and tax systems remain deeply biased against the interests of majority world countries, and reviews the politics behind the current global setup for regulating tax and illicit financial flows. In addition, it discusses policy solutions and how progressive transformation could be supported. Particular attention is given to large volumes of illicit financial flows and associated tax revenue losses, and to tax transparency. Development scholars have recently suggested shifting from ‘international development’ to ‘global development,’ looking no longer primarily or only at ‘low income’ or ‘developing’ countries, but at challenges faced across both the North and South. This chapter argues that, for this shift to be complete, the new global development paradigm has to encompass addressing and redressing the structural inequities in the global financial and tax systems that have been established, and are maintained by, minority world countries.