• Login
  • Register
  • Search

Implications of Tax Havens on Government Revenue

Nana Kwasi Karikari


The contribution of government expenditure to the level of economic growth cannot be underestimated. Unfortunately, resources for the governmental expenditure, though limited, find their way out of the coffers. This paper tries to elaborate on the adverse effect of the existence of tax havens on government expenditure that seeks to promote economic growth in developing countries. Literature indicates that high tax rates are a fundamental reason for the proliferation of government developmental funds-taxes, being syphoned to tax havens. Corrupt officials in government are also deemed to aid the intended government tax in reaching tax havens. In the end, international integration of tax bodies within governments and economies may lead to the strengthening of tax laws and downward review of tax rates can make tax obligations conducive and compelling, for economic growth.


tax havens; government expenditure; economic growth

Full Text:



Beckett, P., (2016) www.linkedin.com/pulse/representative-impact-isle-man-low-taxarea-human-rights-paul-beckett

Wilson P., (2009). Taxation and Development in Ghana: Finance, equity and accountability. Tax Justice Network Country Report Series.

Kumar, C (2014) Africa rising? Inequalities and the essential role of fair taxation, London: Christian Aid http://www.christianaid.org.uk/images/Africa-tax-and-inequality-report-Feb2014.pdf

Hardoon, D. F., R. and Ayele, S. (2016) An Economy For The 1%: How privilege and power in the economy drive extreme inequality and how this can be stopped, Oxfam Briefing Paper 210, January, Oxford: Oxfam https://www.oxfam.org/en/research/economy-1

Price-Waterhouse Coopers, (2015) Navigating Taxation. A quick guide to taxation in Ghana.

Zucman, G. (2014) “Taxing Across Borders: Tracking Personal Wealth and Corporate Profits”, Journal of Economic Perspectives. http://gabriel-zucman.eu/files/Zucman2014JEP.pdf

Radu, D. I. (2012), Tax Havens Impact on the World Economy, Procedia-Social and Behavioural Sciences, 62, 398-402.

European Commission 1997 and OECD 1998 (OECD 1998: Harmful Tax Competition: an Emerging Global Issue. Paris: OECD).

Hines J., (2004) Prosperous the tax Havens?, University of Michigan and NBER, Michigan, 6.

Crivelli, E., De Mooij, R., and Keen, M. (2015) “Base Erosion, Profit Shifting and Developing Countries”, IMF Working Paper 40, Washington DC: IMF https://www.imf.org/external/pubs/ft/wp/2015/wp15118.pdf

Desai, M. A., C. F. Foley and J. R. Hines Jr. (2006a) “The Demand for Tax Haven Operations” Journal of Public Economics, 90, 513-531.

Dharmapala, D. and Hines, J. R. Jr. (2006) “Which Countries Become Tax Havens?” NBER Working Paper #12802.

OECD Report, 2012. The Global Forum on Transparency and Exchange of Information For Tax Purposes.

de Mooij, R. A.,and Sjef E.. "Corporate Tax Elasticities: A Reader’s Guide to Empirical Findings." Oxford Review of Economic Policy24, no. 4 (2008): 680-697.

Diamond P. A. and Mirrlees J. A. (1971). “Optimal taxation and public production, I: Production efficiency (II: Tax rules).” American Economic Review 61:8-27 (261-278).

Gordon, R. H. and Hines J. R. Jr. (2002). “International taxation.” in Alan J. Auerbach and Martin Feldstein (eds.) Handbook of public economics, vol. 4 (Amsterdam: NorthHolland), 1935-1995.

DOI: http://dx.doi.org/10.18686/fm.v2i2.1052