Tax Haven Loss to Russia Tops $800Bln Over 20 Years

It was revealed that more than 40 percent of Russia's foreign trade went through these murky tax havens, causing up to $1 trillion in lost tax revenues over the past two decades. Annual losses are estimated at tens of billions of dollars.

MOSCOW, November 25 (Sputnik) — Russian President Vladimir Putin has approved a law to help the country recover money from foreign tax havens, after offshore tax sheltering over the past two decades has been shown to decrease Russian revenues by over $800 billion.

In 2013, the Russian Accounts Chamber released a groundbreaking report uncovering $329 billion in illegal tax sheltering by Russian entities in foreign low-tax zones, dubbed tax havens.

It was further revealed that more than 40 percent of Russia's foreign trade went through these murky tax havens, causing up to $1 trillion in lost tax revenues over the past two decades. Annual losses are estimated at tens of billions of dollars.

According to the Russian Finance Ministry, Russia lost more than $62 billion to foreign tax havens in 2013, up 14.8 percent in 2012.

The Central Bank of Russia estimates that the offshore tax havens of Russian business and non-profit entities hid over $446.8 billion from the Russian economy between 2000 and 2014. These funds, representing a year of the country's budget in 2013, were concealed in violation of financial, budget, tax and currency laws.

In July 2014, Russian Finance Minister Anton Siluanov said that the country was losing roughly $50 billion to Cyprus and the Netherlands every year, and almost half of this money is the profits of Russian tax residents. Siluanov added that a new modification to the country's "deoffshorization" law would secure an additional $30 billion in tax revenues.

Sergei Glazyev, adviser to President Putin on regional economic integration, said in October that Russia had lost more than $1.5 trillion to capital flight over the past decade, including offshore taxes. Hundreds of billions of dollars' worth of investment the country urgently needs to recapitalize its banks are being siphoned off, he stressed.