Tax Havens Have No Economic Purpose, Say Economists

May 10, 2016 International Tax Cooperation

Chinese Top Brass Use Tax HavensLONDON – A group of prominent economist are banding together to claim that tax havens serve no economic purpose and should be abolished.

In a join-letter released on May 9th more than 300 of the world’s leading economists called on governments across the world to put an end to financial secrecy and to the regulations which allow tax havens to thrive.

In the letter it was claimed that tax havens do nothing to improve overall global wealth, and that tax havens do not have any justifiable economic purpose.

The authors of the letter conceded that they hold no consensus regarding what level of taxation is appropriate, and on what is the idea balance between direct and indirect taxes, but they “agreed that territories allowing assets to be hidden in shell companies or which encourage profits to be booked by companies that do no business there, are distorting the working of the global economy.”

The economists claimed that in order to fight the prevalence of tax evasion, world leaders need to take cohesive and coordinated effort to close down tax havens, and to ensure that the closure is done in such a manner that the end of one tax haven does not simply lead to an exodus of illicit funds to a different tax haven.

Photo by: victoria white2010