Tax havens - a warning

I'm coming to this late, I know, but I couldn't help but bring some attention to Nicholas Shaxson's book Treasure Islands - an attempt to reveal, the scope, scale and influence of offshore tax havens in our politics and economics.

Published last year, Shaxson's view is that to understand global economics, and things like the failed efforts to develop some emerging economies, we have to understand the pervasive and pernicious nature of the offshore tax haven environment.

It's the first attempt I've read to articulate their role in the global economy and their influence over decision makers and the power they confer on those that promote and advocate their use.

It becomes truly chilling when he details the kind of sums that are being filtered offshore and the people who are doing it. In short Treasure Islands is a case for saying that the global economy cannot be reformed unless we get to grips with offshore havens.

It should be a stark warning to many about that they are up to. The interesting issue will be whether politicians will engage with it in the way Shaxson wants them to. Tax has already become a core public concern. Last summer saw a spate of demonstrations outside High Street stores over tax avoidance and this week calls were made to investigate whether Whitehall civil servants have been avoiding tax on their salaries. Tax is centre stage in political debate and we are, perhaps, more sensitive to it than ever before.

But after an initial wave of interest in the wake of the credit crunch, the big issue of what to do with tax havens seems to have receded - for now. Shaxson's book places it on the agenda of high politics and few in power can be unaware of its importance. But what to do about it?

The last part of Shaxson's book is a call to action for business, politicians and journalists to begin tackling the issue. But will people act?  Grasping what is at stake would have been difficult before this book. Shaxson gives it form and structure such that it can be understood.

Businessess leaders should be looking at this carefully. The use of tax havens goes to the heart of policy areas like sustainability, transparency and ethical business - all the topics that modern businesses love to talk about in their prospectuses and promotional materials. It's not just about saving energy and doing good works in the communities in which they work. It's also about being fair about the tax they pay. Shaxson emphatically makes the use of tax havens part of the ethics agenda (many others have argued this for years - it's just that Treasure Islands captures the issue in one neat readable tome). I suspect from Shaxson's point of view that unless tax havens are built into the corporate sustainability, transparency and ethics agenda then companies have barely begun to engage with these issues.

It's as well they do because I also suspect Shaxson has gone some way to giving the debate about tax avoidance fresh momentum. That's not entirely fair. In all honesty, this book should probably supercharge it.


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