Monitoring Policy Making at the United Nations |
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Picture Credit: Guardian Tax Havens
Offshore tax havens, spread by new computing and telecommunications, provide an unprecedented tax shelter, enabling rich citizens and corporations to escape the national tax system. Wealthy tax evaders save millions, while public services and infrastructure in their home countries, as well as on the small island havens, remain drastically underfunded.
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State Sovereignty and Corruption | State Sovereignty and the Global Economy
Articles
2008 | 2007 | 2006 | 2005 | Archived Articles
Offshore Finance, Onshore Complicity (March 2004)
Offshore financial centers provide secret havens for money laundering and tax evasion. In this GPF policy paper, Jason Garred pierces the veil of these mysterious places, showing how they provide services for corporations and wealthy individuals, enabling escape from onshore tax and regulatory authorities. Garred shows that offshore centers exists with the complicity of major money-center governments and banks. They assist criminal activities, pose serious problems of international financial stability and undermine long-established tax and social welfare systems. (Global Policy Forum)2008
EU Considers Toughening Offensive on Tax Havens (May 14, 2008)
The EU has decided to extend its tax havens directive – which impedes individuals from opening bank accounts abroad to avoid interest taxes – to include legal entities. Only Luxemburg disagreed, claiming that it sees “no loopholes in the current rules.” But every year, EU countries are loosing billions of euros through tax evasion. It took fourteen years of negotiations to implement the current rules and some fear that making amendments will also be a slow process. (International Herald Tribune)Europe: Tax Havens Cheating the Poor (April 30, 2008)
According to Tax Justice Network, in 2002, tax authorities lost five times the amount of money needed to reach the Millennium Development Goals on poverty reduction as a result of world wide tax evasion. This article criticizes the “slightly schizophrenic” policy of the European Union on tax avoidance. While the EU has installed a code of conduct on taxation of corporations, most of the notorious tax havens are located within the EU or in overseas territories belonging to its member states. Eurodad, the European Network for Debt and Development, urges France to bring the issue back on the agenda during its EU’s presidency in the second half of 2008. (Inter Press Service)Tax Havens of the World (March 4, 2008)
This article provides a list of countries labeled as tax havens by the Organization for Economic Co-Operation and Development (OECD), the International Monetary Fund (IMF), taxresearch.org and the US Stop Tax Havens Abuse Act. The OECD marked Andorra, Liechtenstein and Monaco as “uncooperative” because they lack tax transparency. Many of the off-shore tax havens are small countries and “dependent territories” of the UK, the US, New Zealand and the Netherlands. (Reuters)Europe vs the Super-Rich (March 4, 2008)
The European Union wants to tackle tax havens by strengthening the 2005 “savings tax directive.” Skeptics say closing down these tax havens will not stop tax evaders from placing their money outside of Europe. Some estimate that tax havens around the world hold between $7 and $12 trillion. If this money was taxed, it would yield enough revenue to pay for “many of the UN’s Millennium Development Goals,” the author states. Tax havens are the ideal means for criminals to launder money obtained by illegal practices such as drug trade and terrorism. (Independent)2007
Jersey Presses the Self-Destruct Button (October-December, 2007)
In the 1970s and 80s, politicians in the island of Jersey turned the British Chanel territory into a center for offshore financial services. The financial services industry created impressive economic growth for the last three decades. But the dark sides of this growth are now starting to show. Locals live in poverty and tourism is decreasing. (Tax Justice Network)A Hedge Haven Makes Its Rules Even Lighter (September 29, 2007)
The island of Jersey, located in the English Channel, has long been an offshore hedge fund haven, with funds totaling US$ 81 billion. But from January 2008 officials will introduce a ‘zero-regulation regime’ on the island, removing all restrictions on financial transactions. According to the director at Jersey Finance, a legislative institution, demands from the hedge fund community directly resulted in the new deregulation. Offshore havens, which reached a total of US $1.17 trillion in July 2006, could see competition for deregulation result in widespread fraud, financial crises and monopolies. (Wall Street Journal)World Bank to Study Offshore (September 12, 2007)
Responding to pressure from the Norwegian government, the World Bank has agreed to publish a report on offshore financial centers as part of the Bank’s anti-corruption work. Preceding the World Bank decision, the Tax Justice Network and other NGOs had actively campaigned Norway and other members of the “Leading Group on Solidarity Levies to Fund Development” to address the problem of tax evasion and offshore centers. The NGOs pointed out that every year, countries loose “hundreds of billions of dollars” through tax evasion and rich countries bear “at least as much [of] the responsibility” as poor countries do.Offshore Tax Evasion (June 20, 2007)
The Bank of International Settlements, the International Monetary Fund and the Organization for Economic Cooperation and Development estimate that a total of US$5-7 trillion is held offshore. This Globalist article warns of the threat that tax evasion has on sovereign governments and argues that offshore tax evasion has broader implications to the lost profits of the tax evaded.Corporate Profits Take An Offshore Vacation (February 23, 2007)
This Inter Press Service article highlights the increasingly common practice by high technology and pharmaceutical industries of registering patents and licenses in tax havens to avoid paying high taxes while conducting the majority of their operations in other countries. The author states that countries are beginning to pursue corporations that engage in these practices, but governments such as the US have failed to adopt “tough measures to combat such royalty-shifting.”Haemorrhaging Money (2007)
This Christian Aid report examines the scale, nature and problems of illicit capital flows. Capital flight reduce the funds available for health and other public services in several countries. Further, tax havens and tax evasions erode the rule of law and encourage corruption. The report estimates that every year international investors move US$500 billion from developing countries. In comparison, global aid flows amount to roughly US$100 billion per year.Closing the Floodgates (January 2007)
Tax Justice Network reviews the scale and extent of the problem of tax havens. This report assesses the damage caused by lost taxation revenues and criticizes governments for not taking appropriate steps to prevent such abuse. The report concludes that the amount diverted would be sufficient to finance the UN Millennium Development Goals.2006
How Tax Shelters Brought Trouble to Billionaire Clan (July 31, 2006)
This Wall Street Journal article calls attention to offshore tax-dodging US citizens. The article discusses the case of the Wyly brothers, who have parked large sums in trusts on the Isle of Man, a British tax haven in the English Channel. Lawmakers and US prosecutors see the base as an example of how rich individuals evade taxes and break securities laws through the use of offshore shell companies and compliant “trustees.”Swiss Fight against Tax Cheats Aids Singapore's Banking Quest (February 6, 2006)
The “borderless world of international banking” has facilitated Singapore’s rise as an offshore tax haven for the world’s rich. In response to pressure from the European Union, Switzerland, a longtime center of offshore assets, has agreed to stiffen laws against tax evasion. As a result, many banks have relocated their operations to Singapore, which has passed laws to strengthen account secrecy and attract foreign depositors, enabling the world’s richest citizens to continue evading taxes. (Wall Street Journal)2005
The Shirts Off Their Backs (September 2005)
Tax revenue is an important source of government funding for basic services like health and education. Yet competition over foreign investment, trade liberalization, and the establishment of off-shore tax havens have eroded the ability of states to perform these functions, contributing to their impoverishment and weakness. Along with aid and debt cancellation, Christian Aid argues, better tax strategies provide an effective way of alleviating poverty.The Price of Offshore (March 2005)
Research by the Tax Justice Network suggests that "approximately US$11.5 trillion" in assets are held offshore by "high net-worth individuals." Furthermore, the taxes not paid as a result of these funds being held offshore "might exceed US$255 billion each year."Bringing Business Back Ashore (April 4, 2005)
The Inspector General of Justice for Buenos Aires has banned offshore shell companies from doing business in Argentina's capital, in "a step that is the first of its kind, anywhere in the world." Shell companies, sometimes called "International Business Companies" or "mailbox" companies, conduct their business from the safety of tax havens where their beneficiaries can remain anonymous. In a country with a "huge history of tax evasion," the Buenos Aires ban helps prevent tax fraud and money laundering by not allowing owners of assets to hide their true identities by going offshore. (CorpWatch)Archived Articles
