Tax Havens as an Inseparable Element of Regional and Global Economy

Abstract

The three recent major tax scandals, dubbed ‘Lux Leaks’ (2014), ‘Panama Papers’ (2016) and ‘Paradise Papers’ (2017), were on the front pages of the world’s most popular newspapers and the topic of prime time discussion on leading TV and radio stations. The reports spoke of hundreds of influential people from all over the world, as well as thousands of well-known companies and institutions with international reach. The common element between these businesses, companies, institutions and prominent persons from more than fifty countries was money; more specifically, each of the scandals involved hundreds of billions of dollars in unpaid taxes lost by treasuries of countries across five continents. Interestingly enough, the problem remains unsolved despite official efforts to curtail practices used in tax havens and the public outrage against concealing income by members of the establishment or well-liked actors and sportspeople. Have tax havens become an inherent part of regional and global economy? What do these countries really do? What is their role in the modern world? Who benefits from their existence and activities and who loses? Why is it such a difficult endeavour to reduce the scale of their operations, influence and reach? It appears interesting to attempt to provide at least a brief answer to these questions.