IFC critics lack evidence claims Cato spokesman

| 18/05/2011

(Royal Gazette): There is no peer reviewed evidence to support most of the accusations of tax evasion, money laundering and terrorist financing levelled at International Financial Centres (IFCs). That is according to Dan Mitchell, of the Cato Institute, a US-based think tank, who addressed the audience at the Society of Trust and Estates Practitioners (STEP) Caribbean Conference at the Fairmont Southampton (Bermuda) yesterday. In his speech Mitchell sought to debunk some of the myths about IFCs. He said that most of the statistics relied upon by the critics were “make believe” numbers and unveiled where some of the more dubious figures came from.

Starting with the issue of harmful tax competition, he said that no facts have ever been presented to prove that tax competition was harmful, despite the “exogenous” theory espoused by the Capital Export Neutrality (CEN).

Similarly, Mr Mitchell added that the so-called evidence against tax evasion $100 billion of which has been attributed to IFCs was at best uncertain. He said that the number of $70 billion in individual tax evasion quoted by Jack Blum, chairman of the Tax Justice Network USA, turn out to be a “gut-feeling” according to Mr Blum when pressed for an answer on how he had arrived at it by the Congressional Research Service. The other $30 billion, he said, was an Internal Revenue Service estimate for legal tax avoidance by companies in IFCs.

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