Mexico loses $50 bln/year in illegal outflows-report
Mon, 30 Jan 2012 01:17 GMT
MEXICO CITY, Jan 29 (Reuters) - About $50 billion a year is siphoned illegally out of Mexico due largely to tax evasion and trade manipulation, a report showed on Sunday.
At least $872 billion has flowed out of Mexico illegally between 1970 and 2010, according to a report from Washington-based anti-corruption advocacy group Global Financial Integrity.
Illicit outflows have skyrocketed since the North American Free Trade Agreement started in 1994, when global companies flocked to Mexico.
Almost 74 pct of the flows were due to so-called trade mispricing, such as companies manipulating export and import invoices, the report said.
Total illegal outflows accounted for close to $50 billion a year in the last decade, about 6 percent of Mexico's annual economic output, and the group said estimates were conservative because they did not include the proceeds of drug smuggling or human trafficking.
"This is a devastatingly large amount of money for any developing country to lose," said GFI director Raymond W. Baker. "This ... could have been used to develop the Mexican economy, to invest in education, to build roads, or to fight the drug cartels."
The study said authorities could stamp down on the distortion of trade invoices by using computer software to detect prices out of line with international norms and making buyers and sellers both sign a declaration that they had not manipulated prices.
Mexico also needs to deepen its tax treaties with other countries and step up information-sharing, the report said. Mexico has focused on drawing overseas investors to the country by using favorable tax regimes.
For more on the report, see:
http://www.trust.org/trustlaw/news/nearly-900-bln-in-illict-financial-flows-leaves-mexico-1970-2010/
(Reporting by Michael O'Boyle; Editing by Krista Hughes and Eric Walsh)
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