Is Panama Really Your Tax Haven? Secrecy Jurisdictions and the Countries They Harm

Jansky P., Meinzer M. and Palansky M. (2018): "Is Panama Really Your Tax Haven? Secrecy Jurisdictions and the Countries They Harm" IES Working Papers 23/2018. IES FSV. Charles University.

29 Pages Posted: 8 Nov 2018

See all articles by Petr Jansky

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies

Markus Meinzer

Tax Justice Network

Miroslav Palanský

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies, Students

Date Written: October 16, 2018

Abstract

Secrecy jurisdictions provide services that enable the residents of other countries to escape the laws and regulations of their home economies, evade tax, or hide their legally or illegally obtained assets. Recent offshore leaks offer only a limited and biased view of the world of financial secrecy. In this paper we quantify which secrecy jurisdictions provide secrecy to which countries and assess how successful countries are in targeting these jurisdictions with their policies. To that objective we develop the Bilateral Financial Secrecy Index (BFSI) and estimate it for 86 countries by quantifying the financial secrecy supplied to them by up to 100 secrecy jurisdictions. We then evaluate two major recent policy efforts by comparing them with the results of the BFSI. First, we focus on the blacklisting process of the European Commission and find that most of the important secrecy jurisdictions for EU member states have been identified by the lists. Second, we link the results to data on active bilateral automatic information exchange treaties to assess how well-aimed are the policymakers’ limited resources. We argue that while low-secrecy jurisdictions’ gains are maximized if a large share of received secrecy is covered by automatic information exchange, tax havens aim not to activate these relationships with countries to which they supply secrecy. Our results show that so far, some major secrecy jurisdictions successfully keep their most prominent relationships uncovered by automatic information exchange, and activating these relationships may thus be an effective tool to curb secrecy.

Keywords: tax havens, secrecy jurisdictions, financial secrecy, financial transparency, offshore finance, automatic exchange of information, global development

JEL Classification: F36, F63, F65, H26, O16

Suggested Citation

Jansky, Petr and Meinzer, Markus and Palanský, Miroslav, Is Panama Really Your Tax Haven? Secrecy Jurisdictions and the Countries They Harm (October 16, 2018). Jansky P., Meinzer M. and Palansky M. (2018): "Is Panama Really Your Tax Haven? Secrecy Jurisdictions and the Countries They Harm" IES Working Papers 23/2018. IES FSV. Charles University.. Available at SSRN: https://ssrn.com/abstract=3267366 or http://dx.doi.org/10.2139/ssrn.3267366

Petr Jansky

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies ( email )

Opletalova St. 26
Prague, 11000
Czech Republic

HOME PAGE: http://ies.fsv.cuni.cz/en/staff/jansky

Markus Meinzer (Contact Author)

Tax Justice Network ( email )

38, Stanley Avenue
Chesham, HP5 2JG
United Kingdom

Miroslav Palanský

Charles University in Prague, Faculty of Social Sciences, Institute of Economic Studies, Students ( email )

Opletalova 26
Praha 1
Czech Republic

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