With the Panama Papers scandal still fresh in the memory, Gabriel Zucman, a professor of the University of California at Berkeley, revealed 37.1 percent of Portugal’s riches are tied up abroad, making it the European country with the highest ratio of cash held by institutions outside of its borders.
Zucman, who is a French national with a PhD in Economics from the University of Paris, explained that 8.6 billion dollars is currently tied up in offshore companies, and says that his research has shown that this number is constantly increasing, which makes a perfect breeding ground for increased social inequality.
Zucman first gained international prominence following the publication of his hard-hitting book The Hidden Wealth of Nations late last year.
In comments this week to L’Obs, Zucman argues: “If it is easier to not pay taxes when a person is very wealthy, then this cements inequalities even further, with the rich becoming even richer: they invest their wealth in high return investments and pay little or nothing in the way of taxes on these earnings.”
Despite Portugal topping the Zucman black-list, tax authorities here have spent the past few years upping the ante in retrieving unpaid taxes.
Since 2014, more than 83,000 homes have been attacked by the taxman, while figures out earlier this year also revealed that the taxman set a new record in coercive collections in 2015. While the target set out at the beginning of last year had been 1.1 billion euros, tax collectors improved on this by almost 20 percent, raking in 1.3 billion euros, for an average of 3.5 million euros a day.
However, it remains unclear how many of Portugal’s super-rich were on the receiving end of the taxman’s efforts to replenish the state’s depleted coffers.