Oversight

Tax Justice Network releases ranking of financially secretive countries

Tax Justice NetworkThe Tax Justice Network released last week its Financial Secrecy Index, which ranks countries based on the secrecy and scale of financial activities, showing an estimated $21 trillion to $32 trillion in private untaxed or lightly taxed wealth.

Switzerland ranked first in the index, followed by Luxembourg, Hong Kong, Cayman Islands, Singapore, the U.S., Lebanon, Germany, Jersey, Japan, Panama, Malaysia, Bahrain, Bermuda, Guernsey, the United Arab Emirates, Canada, Austria, Mauritius and the British Virgin Islands.

Countries with the lowest index ranking include Montserrat, Nauru, St. Kitts and Nevis, the Maldives, Cook Islands, Dominica, Samoa, Monaco, Andorra, Brunei Darussalam and Hungary.

Tax Justice Network said the world’s largest banks have developed an aggressively marketed industry to provide secretive offshore financial safehavens for their clients, adding that the problem extends beyond tax evasion.

“In providing secrecy, the offshore world corrupts and distorts markets and investments, shaping them in ways that have nothing to do with efficiency,” the group’s website reads. “The secrecy world creates a criminogenic hothouse for multiple evils including fraud, tax evasion and aggressive tax avoidance, escape from financial regulations, embezzlement, insider dealing, bribery, money laundering, and plenty more. It provides multiple facilities for insiders to extract wealth at the expense of societies elsewhere, creating political impunity and undermining the healthy ‘no taxation without representation’ bargain that has underpinned the growth of accountable modern nation states.”

The group said larger problems of cross-border money laundering and tax evasion perpetuate terrorist and drug financing.

“The only realistic way to address these problems comprehensively is to tackle them at root: by directly confronting offshore secrecy and the global infrastructure that creates it,” the organization’s website reads. “A first step towards this goal is to identify as accurately as possible the jurisdictions that make it their business to provide offshore secrecy.”

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