THE Vatican has denounced worldwide tax corruption, including the use offshore havens that, it says, cultivate “dirty money” and economic inequality, in a new document approved by Pope Francis.
The teaching document, published on Thursday of last week, was produced jointly by the Vatican offices for doctrine and social justice. It had been approved by the Pope in January.
It suggests that more than half of the commercial world transfers its profits to offshore tax havens to the detriment of equality.
“It appears clear that all these have removed decisive resources from the actual economy and contributed to the creation of economic systems founded on inequality,” the document states.
“Furthermore, it is not possible to ignore the fact that those offshore sites, on more occasions, have become usual places of recycling dirty money, which is the fruit of illicit income (thefts, frauds, corruption, criminal associations, mafia, war booties, etc.).”
Nations that profit from these offshore operations, the document says, are guilty of “hypocrisy” by ignoring these crimes simply because they fall outside their jurisdiction.
“Certainly, the tax system prepared by the various nations does not seem to be always equal,” it continues. “Tax avoidance on the part of primary stakeholders, those large financial intermediaries, who move in the market, indicate an unjust removal of resources from the actual economy, and this is damaging for the civil society as a whole.”
The establishment of offshore sites had also encouraged an “enormous outflow” of capital from low-income countries, “thus creating numerous political and economic crises” by “aggravating the public debt” in undeveloped economies.
While the document acknowledges that efforts have been made to curb these practices, political powers are too influenced by the “large amount of capital in their possession” to exercise them, it says.