By TIOL News Service

NEW YORK, FEB 16, 2013: THE global recession seems to have finally taken a toll on the receipt of illicit funds coming from developing countries to tax havens. In 2010, 150 developing countries guesstimated illicit outflows of 8.8 billion to tax havens. In 2009, the fund outflow was to the tune of USD 776 bn. But the peak was scaled in 2008 when it stood at USD 871 bn. As per the latest report of the Global Financial Integrity (GFI), between 2001 to 2010, developing economies lost about USD 5.8 trillion. And the reasons are tax evasion, corruption and other types of crime. During this phase, India lost USD 123 bn.

But, where did the money go? As per the report, there are as many as 50 to 60 tax havens - a major chunk is located in the Caribbean, Europe and the Indian & Pacific oceans. These tax havens account for a mega share of such illegal fund outflows.

As per the GFI's report, ‘Illicit Financial Flows From Developing Countries: 2001-2010', for 2010, India did not figure in the list of top 20 countries. In contrast, China turned out to be the top exporter of illicit capital outflow during the decade with USD 420 bn. India ranked 8th during this period.

The Report states that all the estimates are conservative, as these don't take into account trade mispricing in services, hawala transactions and dealings conducted in cash.