Tax haven crackdown bad for financial services
The financial services industry in tax havens could suffer immensely if the proposed crackdown is carried out, according to a study from RMIT University.
World leaders and organisations are calling for a so-called 'tax haven crackdown', which could see the end to bank secrecy laws in countries such as the Channel Islands, Cayman Islands and the Isle of Man.
"Tax havens will continue to provide reduced banking and financial services due to the new international law," said Dr John McLaren, who studied the future survival of tax havens and offshore financial centres in the new international legal environment.
"However, they still perform an important role by providing expertise in investment, insurance and protecting assets of the wealthy - particularly in countries where individuals are persecuted for their religious beliefs or homosexuality," McLaren said.
"The Australian Government invests its Future Fund through a tax haven - the Cayman Islands - simply because of the expertise and the tax benefits," he added.
But in McLaren's opinion, this area of international taxation law would keep evolving, especially given the financial problems being experienced in Europe and the US.
"Tax havens will be blamed for some of the world's current economic problems," he said. "For example, in Europe, countries in financial crisis will try to blame tax havens for reducing their government revenue."
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