“No legitimate reason”
In stark contrast, Meinzer, believes there is no valid reason to funnel wealth through offshore centres, describing Booth’s reasoning as “constructed arguments” used to justify tax evasion.
“I would object to the notion that there are legitimate reason to stash your money abroad. Even in developing countries or nations like Russia, the tacit agreement that it is legitimate to move money offshore and not declare it is not valid.
“Those stashing money abroad shift the tax burden of unjust regimes onto the rest of the population which are often the least equipped to deal with it. While those with the means to actually change something find ways to take their money out of the country so that these regimes no longer affect them,” he said.
Anti-corruption summit
Referring to the upcoming Anti-Corruption Summit, to be held in London on 12 May, Isle of Man’s chief minister Allan Bell told local media, “It’s going to be a pretty torrid week for the offshore finance centres.”
Aimed at stepping up global action to expose, punish and drive out corruption in all walks of life, the conference, hosted by British Prime Minister David Cameron, will be attended by politicians from 40 countries as well as World Bank and IMF representatives.
According to The Times, Cameron is expected to announce further measures to crack down on tax evasion including forcing foreign firms, which hold billions of pounds worth of property in the UK, to declare who actually owns them.
Panama Papers and increased transparency
Last month, millions of documents – dubbed the Panama Papers – were leaked from Panamanian law firm Mossack Fonseca, revealing how the rich and powerful around the world set up offshore shell companies in places like the British Virgin Islands (BVI) to avoid paying tax in their home countries.
Mounting scrutiny in the wake of scandal lead to several countries announcing a host of transparency measures in a bid to tackle tax evasion.
Cameron revealed that all crown dependencies and overseas territories will now provide company ownership data to UK tax and law enforcement authorities.
He also unveiled a new tax evasion law, making companies criminally liable for employees who aid tax evasion.
Furthermore, the Isle of Man and Gibraltar have joined Europe’s five largest economies — Germany, Britain, France, Italy and Spain — and 17 other jurisdictions in signing up to a confidential beneficial ownership register which would automatically share information on the ultimate owners of companies.
Meanwhile, last week it emerged that the US government has adopted a new ‘due diligence’ rule which means that banks and other institutions will now have to verify the identities of any people who own 25% or more of a company for which it provides an account.
