Top economists' criticism of tax havens

Over 300 leading economists, from some 30 countries, warn of the risks of financial secrecy in a joint letter. The letter, coordinated by Oxfam, is signed by some of the world's top economists, including Thomas Piketty, Nobel laureate Angus Deaton and Jeffery Sachs, as well as professors from Harvard, Oxford, the Sorbonne and other leading universities. The letter is published just days before world leaders gather in London to discuss corruption.

In the letter, addressed to the world's governments, the economists warn of the damage caused by tax havens. While opinions differ on desirable levels of taxation, the signatories agree that territories that allow assets to be hidden away in shell companies are damaging the global economy. They write that there are no economic benefits to tax havens, on the contrary, they cause corruption and prevent governments from collecting important tax revenues. To counter this, they call on world leaders to change the regulatory framework that enables tax avoidance through higher standards of openness and transparency.

UK in the lead
According to the economists, tackling tax havens is no easy task as there are powerful interests that benefit from doing nothing. They also argue that the UK should take a leading role in this effort as it currently controls a third of all the world's tax havens, including the British Virgin Islands.

The biggest losers
While all countries suffer from tax evasion, developing countries are the biggest losers. Every year, the world's poorest countries lose vital tax revenues that could fund education, healthcare and other social services that enable people to lift themselves out of poverty.

The much-discussed Panama Papers have not only highlighted the shortcomings of the international tax system but also put the issue high on the political agenda. However, the problem itself is nothing new and the solution is anything but simple, not least because many influential actors profit from maintaining the status quo.

Openness and transparency
Tax evasion has long been a priority for Oxfam because it drives economic inequality and helps lock people into poverty. With the support of over 300 leading economists, we are calling on world leaders to lift the veil of secrecy and close the existing loopholes that enable tax avoidance. New rules on transparency and information sharing are needed, as well as mandatory rules for companies to disclose all taxable activities and the ownership of companies.

The world's poorest countries lose around USD 170 billion annually in lost tax revenue. This would be enough, among other things, to educate the 57 million children who are currently not in school.