US seen as world's second-biggest tax haven

(iStock)
(iStock)

New York - The US is the world’s second-largest tax haven, behind Switzerland and just ahead of the Cayman Islands, according to a report released on Tuesday.

The Financial Secrecy index, an assessment of global financial centres compiled by the Tax Justice Network, a left-leaning research and advocacy group, bumped up the US from its No. 3 spot in 2015 - the last time the study was conducted - following its increased share of the global market for offshore financial services.

The US now accounts for about 22% of the global market in offshore services, up from 14%, according to the report.

“While the United States has pioneered powerful ways to defend itself against foreign tax havens, it has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion,” the report said.

The authors criticised the US for its “independent-minded approach” to cracking down on tax evasion, money laundering and financial crime. Delaware, Nevada and Wyoming were highlighted as hot spots for secretive “shell” companies, with nominee officers and directors who serve as a front for the actual, hidden owners.

Hong Kong ranks as the fourth most secretive financial jurisdiction, followed by Singapore at No. 5. Taiwan was included for the first time and ranks No. 8.

The index, which is published every two years, ranks countries on their laws regarding the transparency of ownership structures, bank secrecy rules and financial reporting and disclosure requirements. Scores are weighted for size.

This year, it used new criteria including whether countries provide public registers of ownership and annual accounts for limited partnerships.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
17.63
(+0.08)
ZAR/GBP
23.09
(+0.22)
ZAR/EUR
20.73
(+0.20)
ZAR/AUD
12.66
(+0.03)
ZAR/JPY
0.17
(+0.44)
Gold
2010.15
(-0.90)
Silver
28.57
(-1.70)
Platinum
980.00
(-0.30)
Brent Crude
44.95
(+1.33)
Palladium
2239.00
(+0.97)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 945 votes
It depends on how the funds are used.
74% - 6293 votes
No. We should have gotten the loan elsewhere.
15% - 1295 votes
Vote