The Daily Bell. May 4, 2009
Barclays bank is playing a lead role in the establishment of a tax haven in Ghana, in a move that could see huge mineral wealth in West Africa vanish into it from poverty-stricken countries' coffers, the Observer can reveal. The controversial British lender has for the last four years worked closely with the Ghanian government to start an International Financial Services Centre offering low taxes and minimal financial disclosure. Development charities fear that the establishment of a fully operating tax haven so close to oil- and mineral-rich countries such as Nigeria, Sierra Leone and Equatorial Guinea will encourage a rapid increase in tax and capital flight. There is also concern that cocaine barons, increasingly using West Africa as a trafficking route into Europe, could launder drug money through Ghana. The process of establishing a Ghanaian tax haven has been under way since 2005 and Barclays was instrumental from the start when it signed a memorandum of understanding with the country. - UK Guardian
Dominant Social Theme: And the band played on.
Free-Market Analysis: This is pretty astonishing, given what's occurred recently with the G20, Britain and so-called tax havens such as Switzerland. Even while Germany, Britain, etc. are trying to set up a list that would continually punish those countries that offer themselves in a tax-advantaged manner, one of the UK's most prestigious banks is actively working to set up another such scenario. This kind of activity confirms the problem that governments have in eradicating tax advantaged jurisdictions. Yet the point of view of many Western governments seems to be that the amount of taxes and regulations is purely a governmental decision and should not be subject to market forces.