Big Tech’s $2.8bn ‘tax gap’ could fund 700,000 nurses to fight pandemic


Global women’s rights organisation, ActionAid has today (Monday) published new research on the scale of potential tax revenue that could be raised from ‘Big Tech’ companies operating in developing countries.  

ActionAid’s new research analyses Facebook, Alphabet and Microsoft and the potential tax revenue that their market activity could generate, if the tax regime and resulting corporation tax bills better reflected these companies’ economic presence. ‘2020 Quarter Two’ reporting of ‘Big Tech’ companies revealed how shares have soared as a result of increased sales during the outbreak of the pandemic.


Developing countries offer tech businesses new markets, increased global brand recognition and billions of new users’ data, which translate into continuing revenue growth. Little is known about how much tax these companies are currently paying in developing countries, as they are still not required to publicly disclose this information.

This research shows, however, that billions could be at stake in the long overdue reform of international corporate taxation – enough to transform underfunded health and education systems in some of the world’s poorest countries.  

Commenting on the report findings, ActionAid Australia’s Executive Director, Michelle Higelin said:  


“Women  are paying the price  for an outdated system that has allowed  multinational corporations like mining companies and tech giants to rack up huge profits in low income countries, even during lockdowns, while contributing little or nothing towards the public purse which is vital in responding to COVID-19.

“The pandemic has highlighted the urgent needs of women impacted by COVID-19, hunger and unemployment. Governments must take steps to reform our tax systems globally to ensure low-income countries get a fair share and can afford to invest in public services as the pandemic intensifies the global economic crisis and escalating hunger. 

“The $2.8 billion tax gap is just the tip of the iceberg – this research covers only three tech giants. But alone, the money that Facebook, Alphabet and Microsoft would be paying under fairer tax rules could transform public services for millions of people,” Ms Higelin said. 

ActionAid Australia has been calling on the Australian Government to ensure all companies publicly report their financials and ownership structure in each country where they have a presence, which would establish a clear route to fair taxation . This includes Australian companies operating overseas and multinational companies in Australia.  

“The Government was considering the introduction of a public beneficial ownership register to create greater transparency over multinational corporations and their shifting of profits; however, this has stalled. ActionAid’s research released today highlights the urgency of bringing this back onto the table,” Ms Higelin said. 

ActionAid is also calling for a global minimum rate of corporate tax to resolve the issue of multinationals using tax havens to lower their tax bills. Governments urgently need this money to fund public services such as healthcare and social protection for the billions of people affected by the COVID-19 pandemic 

Research findings

  • The potential $2.8bn ‘tax gap’ calculation is based on the share of the three tech giants’ global profits, relative to their number of users and adjusted for countries’ GDP per capita, which accounts for users’ relative values across the 20 countries studied. 2
  • India, Indonesia, Brazil, Nigeria and Bangladesh are the markets studied with the highest ‘tax gaps’ from these three companies. The total ‘tax gap’ for the 20 countries contained in the research is $2.8bn, equivalent to 729,010 nurses, 770,649 midwives or 879,899 primary school teachers. 
  • The WHO estimates that the 20 countries studied by ActionAid need to employ at least 1,790,000 more nurses by 2030 to achieve their benchmark of 40 nurses per 10,000 people. These shortages of nurses could be fully covered in just three years if global tax rules allowed fair taxing of these three ‘Big Tech’ companies and the revenue was allocated for this purpose.
  • Data is revealed in advance of Alphabet reporting its latest quarterly profits on 29 October. It is expected that Alphabet will reveal huge profits which depend significantly on the 1.5 billion people in these 20 countries who use their products. 

In the absence of more transparent reporting requirements it is impossible to determine how much tax, if any, Alphabet or other big tech companies pay to the governments in these countries. If global rules were fair and effective, they could raise enough in tax from Alphabet alone to employ 244,360 nurses, transforming the public health response to COVID-19 in these 20 countries.


Contact: For more information and interviews with ActionAid spokespeople, please contact: Liz Pick, ActionAid Australia’s Media and Communications Manager on +61 (0)422 105 840 or  [email protected].


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Notes to Editors:


Calculations of the potential ‘tax gap’

Calculations refer to an estimated tax liability of these companies – the ‘tax gap’ – if profits were allocated reflecting more closely their economic activity, as estimated based on the number of their ‘users’ in each country.

Profits are calculated based on each company’s 10K report for 2019, filed with the US Securities and Exchange Commission. Because these companies are not required to publish country-by-country reports, modelling is required to calculate profit at country-by-country level.  


Apportioning of profits to each country is based on the estimated number of users in each country (using DataReportal’s Global Digital Overview Report) and adjusted for per capita GDP (current USD) to calculate the ‘value’ of users to each company in different countries, as a proxy for their economic activity. This ‘proxy’ chosen for the research methodology as ‘users’ adjusted for their ‘value’ was considered the most accurate available data for modelling profits, in the absence of publicly available data from the Big Tech companies in developing countries.

Tax rates applied are 25% for each country, in line with calls for a baseline of 25% corporation tax made by the Independent Commission for the Reform of International Corporation Tax (ICRICT). 

Public service equivalents – nurses, midwives and primary school teachers.  

Calculations of the number of public services workers are based on publicly available salary information for key public sector workers provided to the Wage Indicator Foundation’s public sector worker database.

Salary information for midwives, nurses and teachers was available for 12 out of the 20 countries featured in this study. For the other 8 countries, data on average household incomes was sourced from the website and used to generate a prediction of salary based on household income in the relevant country compared to the 12 countries for which salary data exists.  

The research has also drawn on data from the WHO’s 2020 State of the World’s Nursing report to determine the nursing shortages of over 1.7 million across the 20 countries. The WHO benchmark is that countries should have 40 nurses per 10,000 people.