Africa: Tax Havens - An Emerging Challenge to Africa's Development Financing

The term 'tax haven' is a bit of a misnomer because they are not just about tax, but about a whole range of other things too. There is no generally agreed definition of what a tax haven is, but if you drill right down to the core of what these places offer, you end with two words: 'escape,' and 'elsewhere.' Once we understand what this means, it becomes clear why they are such a threat to Africa.

First, escape. Tax havens help wealthy individuals and large corporations escape from criminal laws, from financial regulation, from transparency and disclosure, from inheritance rules, from professional liability, and more. Take your money to a tax haven, and your home rules no longer bind you. In other words, tax havens help wealth elites escape from the rules of civilized society, whether by illegal means or not.

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