DUSHANBE, May 10, 2016, Asia-Plus — According to a coalition of more than 300 of the world”s most senior economists, tax havens such as Panama “serve no useful economic purpose”, Leading experts from 30 countries have written to world leaders warning that there is no economic justification for allowing tax havens to exist.
Tax havens are countries or regions where personal and business taxes are likely to be very low, or even non-existent. As a result, these countries often attract individuals and companies who are seeking to pay less tax than they would at home. Businesses may move their headquarters to a tax haven, or individuals choose to live there for some or all of the year, to qualify for the lower tax regime.
The Telegraph
reported on May 9 that the world’s leading economists have also urged the UK government in particular to do more to lift the veil on offshore secrecy due to its influence.
In the letter, they reportedly argue the UK is uniquely placed to lead the fight against tax havens because it has sovereignty over around a third of the world”s tax havens through its Overseas Territories and Crown Dependencies.
More than half of the companies set up by Mossack Fonseca, the law firm in the Panama Papers leak, were incorporated in British Overseas Territories such as the British Virgin Islands, according to
The Telegraph
.
Among the signatories were reportedly Thomas Piketty, author of the best-selling Capital in the Twenty-First Century, and Angus Deaton, the Edinburgh- born 2015 Nobel Prize-winner for economics.
Influential experts who advise policymakers, such as Jeffrey Sachs, director of Columbia University”s Earth Institute and adviser to UN Secretary General Ban Ki-moon and Olivier Blanchard, former IMF chief economist also penned their names to the letter – along with forty-seven professors from British universities.
All reportedly united to warn global leaders that tax havens undermine countries” ability to collect tax with poorer countries being the biggest losers.
