US backed global gag order shields MNCs: India's tax loss pegged at $24.2 bn over five years

A US-backed global gag order preventing governments from revealing the names of multinational corporations (MNCs) that are found shifting billions into tax havens has caused countries to miss out on over $475 billion in corporate tax from 2016 to 2021, according to a report released today by Tax Justice Network.The biggest loser to the global gag order is the US itself (tax loss of $158.5 billion), followed by France €27.3 billion ( or $32.3 billion); Germany €25.7 billion ( or $30.3 billion) and India Rs 1.805 trillion ( or $24.4 billion). UK with a tax loss of £10.8 billion (or $14.8 billion) and Mexico – MEX$254 billion (or $12.5 billion) follow.Since 2016, multinational companies have had to reveal to government authorities where they earn profits and pay taxes through what’s called country-by-country reporting.

This system was meant to expose tax dodging by showing which companies shift profits to tax havens. But corporate lobbying led to the data being anonymised and not open to public scrutiny. As a result, the rule meant to promote transparency has turned into a ‘global gag order,’ states the State of Tax Justice (2025) report. The US has long opposed public disclosure of such data, and its political pushback has encouraged big American companies to resist moves towards transparency in places like Australia and the EU.

A key driver of the losses is a dramatic escalation in tax abuse by US multinational corporations set loose by President Trump’s 2017 Tax Cuts and Jobs Act, adds the research. US headquartered MNCs are now shifting twice as much profit out of the countries where they operate in and into the US, but are paying even less tax in the US than they were before Trump’s tax cuts were introduced. They are responsible for 29 per cent of all corporate tax losses suffered yearly by all countries.The EU and Australia began to partially lift the global gag order locally this year despite increasingly aggressive lobbying from US MNCs in particular. In June this year, all countries but the US committed in a UN outcome document to take steps towards lifting the global gag order by evaluating the option of a global public database for the reports in the future.Efforts to adequately tax US MNCs and other multinational corporations will be front and centre this month at a negotiating session in Nairobi where countries will continue work on a world-first United Nations tax convention. ^<br><br>Transparency measures to ensure fair access to information are part of the package, and countries can now more ambitiously commit to lift the global gag order fully, ensuring every member state – and their citizens – would benefit.The convention is largely seen as countries’ last resort to push back against the new Trump administration’s sweeping threats and attacks on the tax sovereignty of nations – that is, on the right of a nation to decide who to tax within its borders, how much and what for.Alex Cobham, chief executive at Tax Justice Network said, “The world is at a fork in the road. One path leads to tax subjugation under Trump and US multinationals, while the other leads to a collective defence of tax sovereignty at the UN that protects every country’s taxing rights.”