Offshore Havens Blamed For UK Tax Increases

by Jason Gorringe, Tax-News.com, London

01 March 2002

A report released by the Association for Accountancy and Business Affairs (AABA), a left wing pressure group comprising accountants, academics and MPs has blamed offshore havens for creating the need to implement the tax increases hinted at by Prime Minister Tony Blair in recent speeches.

According to the report, entitled 'No Accounting For Tax Havens', companies such as Lakshmi Mittal's LNM steel group, Virgin, Microsoft, Enron, Exxon, and Rupert Murdoch's News Corporation, to name but a few, are costing the UK Government an estimated £85 million per year.

'The Government says if people want a better National Health Service they've got to pay more tax, but that presupposes that all those who should be paying tax are paying tax. Yet many big companies earning substantial revenues in the UK pay little or no tax here,' explained the report's co-author, Essex University Accounting Professor Prem Sikka.

Although the practice of establishing offshore subsidiary companies is a perfectly legal one, the report lashes out at the offshore havens, claiming that they: 'merely shuffle cash around to create financial instability, dodge taxes and cheat people'.

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