World leaders told there's no place for tax havens.
More than 300 leading economists from 30 countries have written to world leaders warning there is no economic justification for allowing tax havens.
The letter comes ahead of the UK government’s anti-corruption summit in London this Thursday, which politicians from 40 countries as well as World Bank and IMF representatives are expected to attend.
Among the illustrious list of signatories are three Scottish-based economists: professor Andrew Goudie, the Scottish Government’s former chief economist and current special adviser to the Principal of the University of Strathclyde; Professor Mike Danson, professor of Enterprise Policy at Heriott-Watt University; and Dr Zofia Lapniewska, a post-doctoral fellow at Glasgow Caledonian University.
They join Thomas Piketty, author of best-selling Capital in the Twenty-First Century and Angus Deaton, the Edinburgh-born 2015 Nobel Prize-winner for economics among others.
Despite having different views on desirable levels of taxation, the economists all agree 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.”
To counter this, they are urging governments to agree new global rules requiring companies to publicly report taxable activities in every country they operate, and to ensure all territories publicly disclose information about the real owners of companies and trusts.
It’s not good enough for information about company owners in UK-linked tax havens to be available only to HMRC
The economists’ letter argues that the UK is uniquely placed to take a lead in ending offshore secrecy as 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.
Oxfam, which co-ordinated the letter, is urging the government to intervene to ensure that Britain’s offshore territories follow its lead by introducing full public registers showing who controls and profits from companies incorporated there.
Mark Goldring, Oxfam GB chief executive, said: “The case against tax havens has been made by the world’s top economists. If David Cameron wants the anti-corruption summit to really make a difference, he needs to stand up to Britain's Overseas Territories and Crown Dependencies instead of allowing them to carry on operating in secrecy.
“It’s not good enough for information about company owners in UK-linked tax havens to be available only to HMRC – it needs to be fully public to ensure that governments and people around the world can claim the money they are owed and hold tax dodgers to account.”
The economists’ letter argues that the UK is uniquely placed to take a lead in ending offshore secrecy as 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.
