The Tax Justice Network (TJN) has released its 2011 Financial Secrecy Index. It developed the index in 2009 in order to demonstrate the importance of secrecy in global finance and its devastating impact on fair and effective tax collection by developed and developing countries alike. If banks refuse to share information of their practices with the legitimate authorities and bodies that need it, in order to tax wealthy taxpayers appropriately, for example, or to enforce its criminal laws, it creates an enabling environment for illicit financial flows, corruption, money laundering and other harmful activities. This supply side of corruption is never the focus of corruption indices such as the Corruption Perceptions Index by Transparency International, yet it is just as important in measuring the extent of corruption in a country.
The FSI 2011 shows that most secrecy jurisdictions are not in “sunny small palm-fringed islands for shady people” but rather wealthier countries, such as the United States of America, United Kingdom, Germany, and Japan. Switzerland provides the most financial secrecy in the world. In other words, security jurisdictions provides facilities that enable people or entities escape or undermine the laws, rules and regulations of other jurisdictions elsewhere, using secrecy as a prime tool. Members of the Organisation for Economic Cooperation and Development (OECD), and their various dependencies account for 84 per cent of the world market in offshore financial services. The FSI 2011 identified 5 African countries as secrecy jurisdictions, with Liberia offering the most secrecy, followed by Mauritius, Ghana, Botswana, and the Seychelles.
For more information please visit http://taxjustice.blogspot.com/2011/10/tjn-launches-2011-financial-secrecy_4807.html
For information on the East African Tax and Governance network that TJN-Africa is a member of please click here