The widespread use of shell companies to conceal assets in tax-haven banking systems
"It was no mystery. We knew that these things were happening," he said Thursday in Washington.
"But I want to stress that when taxes are evaded, that when state assets are taken and put into these havens, all of these things can have a tremendously negative effect on our mission to end poverty and boost shared prosperity."
At a press conference ahead of the international development lender's twice annual joint meetings with the International Monetary Fund, Kim said that the World Bank is "extremely concerned" about such financial practices, which are sometimes illegal and often used to shield the assets of corrupt government officials and their associates.
Kim said that the World Bank's Stolen Asset Recovery Programme has had "some success over the past few years," but the problem remains.
"We would bunch all of these kinds of activities under what might be called illicit financial flows, where corporations don't pay taxes, where individuals take profits out of a particular country," he said.
The World Bank and IMF have long offered technical assistance to help developing countries combat tax evasion and other corruption, which takes resources out "of the hands of governments and the poor," Kim said.
Avoiding taxes and taking state assets out of a country are "very, very damaging" when the goal is to end extreme poverty.
Kim issued a warning to people trying to evade taxes on legitimate income or seeking to hide illegitimate assets from discovery and seizure.
"The message I'd send is [that] transparency is not going to move backwards," Kim said. "The world is going to become only more and more transparent as we move forward. ... Be very careful."
In the long run, countries need efficient, transparent tax systems.
"I've been in many countries in which the only people who pay taxes are the ones who are too weak to refuse to pay taxes," Kim said. "And you see systems where the rich don't pay and the poor do."