An IMF Study Says the UK Is a Tax Haven

The International Monetary Fund has published a study that seeks to use a neutral formula for determining which jurisdictions are tax havens. The formula used is far from ideal, focusing primarily on the size of the financial services sector relative to the overall economy rather than specific policies such as privacy laws and/or information-sharing policies. But it is worth noting that the United Kingdom was placed on the list of major offshore centers. Does anybody want to guess when the Organization for Economic Cooperation and Development will put the UK on its “tax haven” blacklist? If you answered never, you get a gold star. The OECD is infamous for targeting small and relatively powerless jurisdictions, while giving a free pass to its own member nations - such as the UK, US, Netherlands, Switzerland, Luxembourg, Austria, and Belgium - that have tax haven policies (see this study from the Center for Freedom and Prosperity for more information). In any event, the IMF study is good news since it further exposes OECD hypocrisy and enables persecuted low-tax jurisdictions to more effectively resist pressure from high-tax nations. The IMF study also is good news, since it upsets leftists in the UK, as this column in the Observer illustrates:

The International Monetary Fund has effectively branded Britain a tax haven. The world’s most important financial organisation last week published a working paper seeking a definition of offshore financial centres. For the very first time it ranked Britain alongside the likes of Bermuda and the Cayman Islands - unregulated jurisdictions associated with illicit funds. …The City of London is the world’s largest tax haven… The UK has become a centre for illicit funds drained from many of the world’s poorer countries, and British offshore secrecy prevents those countries from running effective tax regimes.