Marty Sullivan at TaxAnalysts is one of the best tax thinkers in the world. He's doing a new project on offshore.
His latest report is on Jersey. His conclusion is stark:
At the end of 2006, there were $491.6 billion of assets in the Jersey financial sector beneficially owned by non-Jersey individuals who were likely to be illegally avoiding tax on those assets in their home jurisdictions. Rapid growth of bank deposits and mutual funds shares in the first half of 2007 easily pushes the total above $500 billion.
Now let's suppose that the rate of return on this sum is 7%. And that the tax rate should be at least 30%. Jersey costs the world over $10 billion a year in evaded tax.
By itself that's 20% of the sum needed to pay for achievement of the Millennium Development Goals.
What is clear is this: the economy of Jersey is built on the basis of fraud, because that's what tax evasion is. And the cost is to the poor people of the world.
I hope this preys on the conscience of Terry Le Sueur and his colleagues in the Jersey government.
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[…] Marty Sullivan has been continuing his work on the UK’s offshore tax havens, this time looking at the Isle of Man. He concludes: […]
[…] Except there is an explanation for all this. It’s that the fourth estate in tax havens are failing to do their duty to investigate, analyse and inform, with the consequence that the decision making processes in those places are equally shoddy and ill-informed. In so doing journalists in these places harm the democratic processes as much as the politicians and civil servants who support the structures that allows these places to be host to $1 trillion of assets held with intent to evade tax. […]
[…] So let’s be clear: no one who knows they are dealing with clients operating within the law has anything to worry about if there are effective Tax Information Exchange Agreements in place. Jersey’s finance industry is worried. Which is both evidence that Marty Sullivan was right when he said Jersey harbours $500 billion of assets associated with tax evasion and evidence that the industry well knows it. […]
[…] As he noted, that’s a great deal less than we at the Tax Justice Network know tax evasion costs a year. In fact Jersey, Guernsey and the Isle of Man cost $20 billion in tax evasion a year before them. Add in Cayman and maybe the BVI then and we have climate change licked. […]
[…] of these Suspicious Activity Reports in Jersey related to money laundering. Despite the fact that $500 billion of the funds held there are related to tax evasion – which is corruption by the definition of their […]
[…] who have no material back up for what they say are the financial services industry. I have clear, unambiguous evidence that it is generically party to […]
“At the end of 2006, there were $491.6 billion of assets in the Jersey financial sector beneficially owned by non-Jersey individuals who were likely to be illegally avoiding tax on those assets in their home jurisdictions. Rapid growth of bank deposits and mutual funds shares in the first half of 2007 easily pushes the total above $500 billion.”
What an ill informed assumption. Tax evasion is fraud and as such financial institutions treat it as such. If he is to make such broad brush assumptions he should do some better research, if not get involved with the IMF visits in 2008/9 they are visiting for this particular reason. I can tell him for a fact that if there is any suspected tax evasion, which usually arises from being able to supply adequate rationale and planning the beneficial owner will be reported to the Financial Intelligence unit which would end up with the home tax authority. Some 56% of all suspicious activity reports filed in 2007 in Guernsey relate to tax concerns. Don’t blame the offshore jurisdictions for the home tax authorities’ inadequate tax legislation.
HJM
No one believes you.
If we did we’d have to disbelieve that 60,000 people have just confessed in the UK alone to using your territories for tax evasion.
But we do believe they have confessed.
And the only obvious conclusion is that either a) you’re not telling the truth or b) you’re absolutely appalling at suspecting tax evasion.
I’ll believe the latter if you like. But either way, your argument rings very, very hollow.
And any rational observer will see that your comment is an act in self delusion.
Richard
HJM
Can you give a break down of those SAR figures by the way – I can’t find them and curiously neither dould the National Audit Office. Why is that, I wonder?
Richard
[…] the ratio of relative deposits established by Marty Sullivan it’s likely to be split 50% Jersey, 20% Isle of Man and 30% […]
[…] packed day in day out with such cases in these places, because between them there’s $1 trillion of funds deposited on which the income is tax evaded. $175 million is 0.0175% of […]