Countries around the world are on course to lose almost $5 trillion over the next decade due to tax dodging through tax havens like the Cayman Islands. That’s according to a report by the UK’s Tax Justice Network, or TJN.

In order to tighten global tax rules and stem the losses, the group argues that the United Nations should step in and coordinate the international process of reform. The group, which campaigns against what it calls “underpayment” of taxes by multinational corporations and wealthy individuals, claims that the biggest loser from this outflow is the United States and the biggest facilitator of it is the United Kingdom.

“The U.S. loses around $176 billion a year to tax havens,“ said Mark Bou Mansour, TJN’s head of communications. “That’s about 11% of the U.S. public health budget. We estimate that, in total, countries around the world lost about $470 billion a year to tax havens over the past decade and are likely to lose a similar amount over the next 10 years.”  

Bou Mansour claimed that the biggest recipient of the global outflows — the biggest enabler of this tax dodging — is the United Kingdom, along with a string of small former British colonies, some of which are in the Caribbean.

“This global network, which includes British Overseas Territories like the Cayman Islands and the British Virgin Islands, and Crown Dependencies like Jersey and Guernsey, is often referred to as the U.K.’s second empire, with all these former colonies now funneling money into [U.K. financial center] the City of London,” he said.  

But anti-tax haven campaigners point out that the Brits are not the only offenders, and while the U.S. is numerically the biggest loser, it is not by any means the worst affected nation. Low-income countries suffer much more from these lost revenues. In addition, Ian Gary of the Financial Accountability and Corporate Transparency Coalition in Washington insisted that the U.S. isn’t blameless.

“When people think about tax havens, they think about palm-fringed Caribbean islands, but some of the most important tax havens now are snow-covered places, like South Dakota in the wintertime,” Gary said. “The U.S. is a major destination for dirty money.”

The call for the United Nations to spearhead the crackdown on tax avoidance and evasion has been fueled by dissatisfaction with the organization that is currently leading the process of reform, the Organisation for Economic Co-operation and Development, or OECD — a club of 38 mostly high-income economies.  

“The problem is that global tax rules have been decided behind closed doors at the OECD where corporate lobbyists tend to have disproportionate representation,” said Bou Mansour of TJN. “The reforms have been watered down. From any angle you look at it, the process has completely failed.”

The OECD strongly disagrees. The group’s director of the Center for Tax Policy and Administration, Manal Corwin, told Marketplace that Tax Justice Network has exaggerated the levels of offshore tax evasion by a factor of 10, and that the organization’s estimate of corporate tax avoidance is also excessive.   

“Their methodology is flawed,“ she said, “and their projections don’t take into account significant developments.”   

Among those developments fostered by the OECD, Corwin cited the agreed plan for a global minimum corporate tax rate of 15% and the automatic information-sharing agreements between tax authorities in different countries, which the IMF reports has reduced foreign-owned deposits in offshore jurisdiction by an average of 25%.  

Corwin also said that TJN isn’t giving the OECD any credit for the progress it has made. “They completely ignore some of the most important reforms seen in international taxation,“ she said.

But other tax justice campaigners claim that global tax reform has stalled and must be taken up by the United Nations which represents all countries, rich and poor.

“The U.N. is a much more inclusive forum than the OECD,” observed Irene Ovinji-Odida, a Ugandan lawyer, politician and key member of the Independent Commission for the Reform of International Corporate Taxation.

“Look at the U.N. as the place where all countries are at the table on an equal basis, where the rules are clear. And they can then negotiate, as has been done with climate change and the law of the sea,” she said, stressing the vital importance of protecting government revenues. “Only governments can do certain things that the whole of society needs, like public health and education.”

Ian Gary of the FACT Coalition argued that democracy itself would be at risk “if the wealthy dodge paying taxes, and the poor and middle class are left footing the bill to maintain a civilized society.”

At the OECD, Manal Corwin agreed that further global taxation reform is essential, and insisted that her organization would continue its work on curbing avoidance and evasion, even if the UN General Assembly voted to muscle in on the issue. That raises an intriguing possibility: Two international bodies competing with each other to shut down the tax havens. It could prove doubly effective.