Hohoe (V/R), Feb. 6, - Ghana
ranked 95th in the global Financial Secrecy Index (FSI) 2018 report polling a
secrecy score of 62 in a study published by the Tax Justice Network in conjunction
with Transparency International, a global coalition against corruption.
A total of 112 ‘Secrecy
Jurisdictions’ were sampled – a term alternate to the more widely used term tax
havens - use secrecy to attract illicit and illegitimate or abusive financial
flows, a release available to the Ghana News Agency said.
It said Ghana scored more than
average in ownership registration, integrity of tax and financial regulation,
international standards and cooperation but performed abysmally under legal
entity transparency, which entails public company ownership, public company
accounts, country-by-country reporting, corporate tax disclosure and legal
entity identifier, scoring “exceptionally secretive.”
The report is puzzled that
government is positioning to re-establish an International Financial Services
Centre (IFSC), a secrecy jurisdiction, knowing it failed in its quest to become
one a decade ago.
It said beyond the dangers of
IFSCs in facilitating money laundering and other illicit financial flows it added
the ability of the central bank to effectively regulate the financial system
was questionable.
The report said given the
secretive nature of IFSC and the inability of government and Parliament to pass
the Right to Information Bill – to access reliable and timely information – in
addition to the failure of the Central Bank to carry out a rigorous impact
assessment on how the economy fared when the Barclays Bank Ghana Limited (BBGL)
was granted offshore banking license, leave much to be desired.
Topping the list is Switzerland,
followed by US, Cayman Islands, Hong Kong, Singapore, Luxembourg, Germany,
Taiwan, United Arab Emirates and Guernsey, in the first 10 ranking.
Kenya occupies the 27 position,
Liberia 38, Mauritius 49, South Africa 50, Tanzania 75, Botswana 103 and the
Gambia ranking 106, as part of the African showing in the global league.
The report estimates $21 to $32
trillion of private financial wealth is located, untaxed or lightly taxed, in
secrecy jurisdictions around the world.
It said illicit cross-border
financial flows have been estimated at $1- $1.6 trillion per year, dwarfing the
$135 billion or so in global foreign aid noting African countries alone since
the 1970s have jointly lost over $1 trillion in capital flight, while combined
external debts are less than $200 billion.
So Africa is a major net creditor
to the world - but its assets are in the hands of a wealthy élite, protected by
offshore secrecy; while the debts are shouldered by broad African populations
making all poor and rich countries like Greece, Italy and Portugal, for
example, suffering state loot via offshore secrecy.
It said a global industry has
evolved involving the world's biggest banks, law practices, accounting firms
and specialist providers who design and market secretive offshore structures
for their tax- and law-dodging clients.
The report said in providing
secrecy, the offshore world corrupts and distorts markets and investments,
shaping them in ways that have nothing to do with efficiency.
“The secrecy world creates a
criminogenic hothouse for multiple evils including fraud, tax cheating, escape
from financial regulations, embezzlement, insider dealing, bribery, money
laundering, and plenty more. It provides multiple ways for insiders to extract
wealth at the expense of societies, creating political impunity and undermining
the healthy 'no taxation without representation' bargain that has underpinned
the growth of accountable modern nation states. Many poorer countries, deprived
of tax and haemorrhaging capital into secrecy jurisdictions, rely on foreign
aid handouts,” it said.
The edifice of global financial
secrecy has been weakened by advocacy and as mandated by the G20 countries for
Organisation for Economic Cooperation Development (OECD)to fashion modalities -
but it remains fully alive and hugely destructive. Despite what you may have
read in the media, Swiss banking secrecy is far from dead. Without sustained
political pressure from millions of people, the momentum could be lost.
The only realistic way to address
these problems comprehensively is to tackle the menace directly by confronting
offshore secrecy and the global infrastructure that creates it, the report
said.
GNA
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