Implications of Tax Havens on Government Revenue
Abstract
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.
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DOI: http://dx.doi.org/10.18686/fm.v2i2.1052
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