Update: as it happens, The Economist has just published an excellent story about the Bahamas, subtitled The Bahamas Cocks a Snook at the War on Tax Dodgers. (Our only beef with that subtitle is that this is about so much more than just tax.)
We’ve periodically remarked on the Bahamas as a secrecy jurisdiction of great concern. Like Panama, it’s generally had a greater tolerance of dirty money than most modern offshore centres: more of a willingness to turn a blind eye and to overlook noncompliance by Bahamas-based actors of its own rules and laws.
The purpose of this blog is to flag up the Bahamas in a more pointed way: as a major wrecking-ball threatening global efforts to clamp down on cross-border financial secrecy.
The Bahamas has hosted an offshore centre for crime and tax evasion for decades, and it has historically had a higher tolerance for dirty money than most tax havens. Its secrecy score of 79 in our Financial Secrecy Index is one of the world’s highest. Treasure Islands summarises an important component of the Bahamas’ history and identity, via Chicago gangster Al Capone’s moneyman, Meyer Lansky:
In June 2014 we wrote an article about Big Bills: those high-value cash notes that are primarily of use to the world’s criminals (when was the last time you saw a 500 Euro note in the flesh, for instance?) The countries that print them can literally make a killing from so doing.
Big bills have been in the news again recently, with proposals in Europe stop printing the damn things. A New York Times headline today summarises: Getting Rid of Big Currency Notes Could Help Fight Crime.
Tax avoidance fuels global inequality CNN
Opinion piece by Joseph Stiglitz.
Tax reforms are small beer when big firms are denying poor countries billions The Guardian
See also our recent press release: OECD’s BEPS proposals will not be the end of tax avoidance by multinationals
Singapore Urges Need For Tax Competition After BEPS Tax-News
But tax competition, or rather tax wars, are harmful, see the Fools’ Gold blog on What is (tax) competitiveness?
Apple Inc., Amazon See Mounting Tax Investigations In European Union International Business Times
Global Tax Avoidance: Who’s Responsible? Carnegie Council
Ex-Guatemala Vice President Baldetti Arrested in Tax Fraud Probe Bloomberg
See also: Guatemala’s Corruption Investigations Make Swift Strides The New York Times
Illicit financial outflows rise in Africa Daily News Tanzania
“They have their own people they want to blame” The Africa Report
“Corruption is truly collectivized. It must have a privately incorporated business, ideally with at least one shell company, management service company, special purpose vehicle or trust, and again ideally in a tax haven.”