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economy while developing nations will be hamstrung in their attempts to promote

economic growth. “99

Nevertheless, judging from the general endorsement given to the OECD Report it is clear

that the leaders of several of the industrialized nations have a concern that a major

element of tax reform for the offshore financial centers is a requirement to curtail bank

secrecy. This is particularly true as the world economy becomes more integrated and

technology improves it, thus makes it easier for taxpayers to avoid excessive taxation.

Senor Vito Tanzi, a senior International Monetary Fund (IMF) economist has noted that ‘

today, individuals may be able to choose among many countries in deciding where to

work, to shop, to invest their financial capital, to allocate the production activities of the

enterprises they control and so on. In these decisions, they take into account the impact of

taxes, especially as long as the tax systems of different countries diverge as much as they

do today.’100

It follows from this, that there is ample evidence that tends to support the view taken by

Mr. Tanzi.101This insight is particularly relevant to international investment flows but is

also an issue to the sportsman or entrepreneur as well. The evidence can be found in the

fact that it is becoming much more customary for citizens of the industrialized nations to

adopt a new domicile in order to reduce their tax burdens. Some famous individuals have

99 Letter sent by US House of Representatives Majority Leader Dick Amey to United States Treasury Secretary Lawrence Summers reported Article Autumn 2000 Edition of the Journal of Society of Trust and Estate Practitioners.

100 Vito Tanzi, ‘Globalization, Tax Competition, and the Future of Tax Systems,’ International Monetary Fund Working Paper No. 96/141, December 1996


See note 11

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