Tax Research UK has published a new briefing on secrecy jurisdictions today. This has also been endorsed by the Tax Justice Network and the Task Force on Financial Integrity and Economic Development. It is available here.
The briefing, the first in a new format, is designed to provide a clear insight into what we think secrecy jurisdictions are, and what problems they cause, all in a somewhat limited length.
At the core of the paper are these arguments:
1. The secrecy they provide facilitates all manner of illicit financial flows. Illicit financial flows include those relating to:
a. The proceeds of crime, including theft, fraud, racketeering, drug dealing, human trafficking and insider dealing;
e. Tax evasion;
f. and much more.
As a result secrecy jurisdictions undermine the rule of law and as such threaten the stability of the world;
2. Secrecy jurisdictions undermine free trade by firstly assisting illicit trade and secondly by creating opacity which prevents the best allocation of the world’s economic resources to productive activity, so reducing world income;
3. Secrecy jurisdictions undermine democracy by seeking to force down the tax rates levied by democratically elected governments. The ballot box is the proper place for these rates to be chosen;
4. Secrecy jurisdictions create opacity, and so mistrust and this increases risk in the world to the disadvantage of all.