EU tax haven list criticised as arbitrary
An academic who specialises in tax havens says a blacklist released by the European Commission last week is arbitrary and poorly constructed.
Transcript
An academic who specialises in tax havens says a blacklist released by the European Commission last week is arbitrary and poorly constructed.
The list of 30 international tax havens was released last week, as part of an EU effort to crackdown on multinational companies trying to avoid paying tax.
The list includes five Pacific countries; Niue, Nauru, the Marshall Islands, the Cook Islands and Vanuatu.
But Anthony van Fossen, an adjunct research fellow at Australia’s Griffith University, says the list has ignored some major tax havens, and instead highlighted insignificant havens like Niue.
ANTHONY VAN FOSSEN: It is a very artificial exercise in that it has been compiled simply by listing the countries that are judged non-compliant with good tax governance by ten or more EU states. And the list is very strange in that some major havens are ignored particularly the havens in the European Union itself and many minor havens including some in the Pacific islands are highlighted. Furthermore the research of the European Union countries which listed Niue has been quite inadequate because the Niue tax haven has been inactive for years. And to list Niue and not to list even major non EU tax havens such as Switzerland, Singapore, the Isle of Man much less the European Union major tax havens such as Luxembourg, Ireland and Cypress means that the list is most charitably seen as an attempt to launch a lighter initiative to bring European Union tax havens into line or perhaps its a hypocritical attempt to deflect attention away from major EU tax havens.
JAMIE TAHANA: It seems like you are suggesting that its picking on the weak countries.
AVF: Yes I think there is an element of that although one would have to say that some of the countries that are listed such as Liechtenstein, Hong Kong and the Cayman Islands are major tax havens.
JT: What’s wrong with their tax policies for them to be considered and for them to have warranted being raised by ten European Union countries?
AVF: All of the countries that are listed have at one time or other in recent years had no or very low taxes for Foreign Investors who create rather artificial entities. I should add that the Marshall Islands is an important and fast growing tax haven. The Cook Islands and Vanuatu are significant tax havens. But another odd thing about the list is that Samoa which is a much more important haven than either the Cook Islands or Vanuatu is not listed. So the criteria seem to be rather arbitrary.
JT: So does that give it any credence, should these countries be worried about any repercussions of being on such a list?
AVF: Blacklists are never desirable things to be on and this blacklisting certainly doesn’t help. So there is some reason to be worried because many people who are potential clients will look at the list and decide to be very wary of doing business with countries that are on the list.
