Tax havens will continue to cause damage so long as they suit those in power, says richard brooks |
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he taxman's decision to offer an amnesty to Brits who have kept quiet about their offshore bank accounts for years is expected to generate a handy £1bn boost for the Chancellor. But as a blow against the damage that tax havens wreak on the global economy - often quite legally - it hardly registers.
Over $10 trillion of personal wealth is stashed in the world's tax havens, at a cost in lost tax of $250bn annually, according to experts at the Tax Justice Network. To put that in context, the UN Millennium Project estimates that a global aid budget of $200bn a year would halve world poverty.
And it's the destitute who suffer most at the hands of the offshore bankers in the first place. The list of dictators - Abacha in Nigeria and Suharto in Indonesia, to name but two - who have pillaged their countries through
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| First Curacao International Bank was the preferred hiding place for the loot from £8bn of VAT fraud |
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offshore accounts makes depressing reading. Add the contribution of corrupt officials, and $50bn leaks out of the poorest countries into the world's tax havens every year.
The damage isn't just economic. Secret accounts facilitate money-laundering, drug-running and even terrorism. Three years ago the UN Security Council reported that post-9/11 efforts to freeze al-Qaeda funds were being frustrated by "The use of shell companies and offshore trusts to hide the identity of individuals or entities engaged in the financing of terrorism."
A recent Panorama film exposed how the secrecy of offshore companies in the British Virgin Islands and Sark enabled an Italian company to dump tonnes of blood contaminated with Hepatitis and HIV on an unsuspecting 'market' - almost certainly somewhere in the Third World.
In Britain, Customs officers last year shut down Netherlands Antilles-based First Curacao International Bank, preferred hiding place for the loot from a virulent form of VAT fraud that cost the taxpayer around £8bn 
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