Wednesday, January 20, 2010

Ghana - the next tax haven?

The Guardian is running this story. It speaks for itself.

"Ghana has had a stern warning from the Organisation for Economic Co-operation and Development to ensure that its emergence as a tax haven does not fuel corruption and crime in west Africa.

Ghana is becoming an offshore financial centre but Jeffrey Owens, head of the OECD's Tax Centre, said: "The last thing Africa needs is a tax haven in the centre of the African continent." Ghana wants to become a west African financial hub, taking advantage of its emergence as an oil producer. This year the first of Ghana's 3.2bn barrels will begin to flow from its waters.

The OECD is in talks with Ghana to guarantee the country "adheres to the highest standards and integrity". Owens said Ghanaian officials "are aware of the risks they are running". Barclays Bank has been advising Ghana's government on establishing its financial centre.

Wilson Prichard, a researcher at the Institute of Development Studies who has closely followed Ghana's development as an offshore centre, said: "Aside from the general social costs associated with the operation of tax havens globally, in the absence of a very strong regulatory framework and very strong standards of transparency there's a particularly high risk that a tax haven in west Africa, which is home to major oil wealth and high levels of corruption, could facilitate large-scale corruption and tax evasion, and pose a correspondingly large risk to good governance and economic growth in the region.""

Barclays, too, might like to consider, in the context of our recent blog, what corporate responsibility means. Shame on it. And well done the OECD for saying what needs to be said.


Blogger Physiocrat said...

What if the UK made itself into a tax haven, with ultra-low corporate and personal taxation? Everyone would want to locate themselves and their businesses here. The economy would boom, unemployment would be history and well-paid jobs would became available for all.

Does this mean that public services would have to be slashed? Not at all. Land values would shoot up as a result of this policy, thereby providing a growing base for a system of land value taxation with which to support public services, now improved to Scandinavian standards.

There may be a snag in this line of reasoning, but I have yet to be told what it is.

3:15 pm  
Anonymous TJN said...

Oh please. Even the vigorous defenders of offshore admit that the UK is among the world's most important tax havens. Non-doms; the original fount of the Eurodollar market; the spider at the centre of the web of crown dependencies and overseas territories - need we go on? Just as we pointed out in the Financial Secrecy Index. And what has been the result? The economy enjoyed a fake boom, unemployment remained a problem and will worsen, and well-paid jobs were available for a few. And public services were slashed - but not as much as they will be, now that the mirage has been exposed.

11:54 pm  

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