Wednesday, September 10, 2008

We are not a tax haven

This blogger used to live in South Africa, not long after the end of apartheid, where one of the common refrains he heard was "I am not a racist, but . . . " - usually followed by an ugly tirade, demonstrating exactly the opposite proposition.

The point of this little story is not to put down the tremendous strides that South Africa has taken in terms of national reconciliation. The point is to draw attention to a similar turn of phrase: "We are not a tax haven."

For good reason, tax havens have a bad name, and the purveyors of offshore murk regularly try to persuade others that theirs is a clean business. Idly searching the internet, it is easy to find countless examples of this, often using the feeble efforts of international bodies such as the OECD and the Financial Action Task Force - which have, in effect, legitimised the illegitimate -- to support their bogus claims. Here are a few examples, all from notable dirty-money centres, which seek to bestow upon themselves rather grander names, such as "international financial centre"

Jersey is not a tax haven
Isle of Man is not a tax haven
Switzerland is not a tax haven
Singapore is not a tax haven, but . . .
Guernsey is not a tax haven . .
Cayman is not a tax haven . .
Barbados is not a tax haven . .
Bermuda is not a tax haven . .
The Netherlands Antilles is not a tax haven.
Malta is not a tax haven. . .
Luxembourg is not a tax haven . .
Aruba is not a tax haven . .
Mauritius is not a tax haven, but . . .
Ireland is not a tax haven but . . .
Cyprus is not a tax haven
Delaware officials just flat out insist that their state is not a shady tax haven
Panama a tax haven? False . . . .

This list stops here, simply because this blogger got bored. Every one of the tax havens specifically explored for this article registered several results. Strangely, a fairly long Google search on "London is not a tax haven" found no relevant results. Perhaps they simply don't bother denying it.

These jurisdictions and their defenders are seeking to define themselves what a tax haven is, then fitting themselves into the categories they create. Given that tax havens exist to provide services to non-residents, it only seems fair to let non-residents define whether or not they are tax havens. So what right do these people have to say whether or not they are tax havens?

4 Comments:

Anonymous Harshal Kulkarni said...

hi,
your blog is full of informative articles. This article is good one.their are only few countries & what about the others like America, India, China, England etc.

11:48 pm  
Anonymous Anonymous said...

Ridiculous. What you seem incapable of acknowledging is that all jurisdictions engage in tax competition. The UK is a tax haven insofar as it welcomes, with vastly expensive tax breaks, non-domiciled residents. It allows them shelter all offshore earnings. Defining a tax haven as a location which enables non-residents to minimise tax misses the point - the mega-wealthy have flooded the UK precisely in order to become resident.

See Russians, Saudis, Chinese etc who have raised the price of real estate in central London to vastly expensive levels.

1:31 pm  
Anonymous TJN said...

Thanks Anonymous (please do leave your name; it's so much more polite)

Perhaps you could read some more of TJN's output. We point, first and foremost, to the City of London, Delaware, New York and the like, as the world's pre-eminent tax havens. But you are right - we should have included them in this list on this blog.

5:24 am  
Blogger Alex Scott said...

Perhaps the reason for Britain not showing up as a tax haven is that as far as earnings attributed to within the UK are concerned, we're not. We just make it particularly easy to shift attribution of earnings to regions which are. You could say we're an outsourcer of tax haven manipulation, rather than being one in our own right. And of course, as we all know, when you outsource something it no longer shows up on the books as your responsibility.

11:22 am  

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