A policy analyst at the Cato Institute who goes by the name Diego Zuluaga has published a journal that is known as Offshore Bet. Cato Institute has its headquarters in Washington DC. The journal has taken on defending the role that is played by offshore centers of finance like Jersey. Many spectators in the finance industry have often criticized these offshore finance centers. Others have argued that they are tax havens. The journal has stated that offshore finance centers have been accused of the illegitimate activity of tax evasion. It also makes it very clear that these centers play a critical role in the development of the US and global economies.
Tax evasion is a felony in the United States of America. If a company has been blacklisted by the Internal Revenue Service (IRS) of tax evasion, it may be facing the possibility of deregistration. The company’s directors may also face a jail term. Another allegation against these offshore financial centers that has come under the spotlight is their role in facilitating corporate and individual tax planning. These activities are entirely legal under the US constitution. However, they stir controversies in the political circles. Economists and financial experts have argued that offshore financial centers play a critical economic function.
These OFCs raise aggregate investment by acting as a mitigating factor when it comes to instances of double and triple taxation. The existence of these centers has also been associated with better economic outcomes in the nations that surround them. Just recently, members of parliament in the United Kingdom passed laws to impose an ownership register in publicly traded companies. The ownership register was to apply to companies in the overseas territories owned by the United Kingdom. The British Overseas territories include the British Virgin Islands, Bermuda and Cayman. The Crown dependencies such as Isle of Man, Guernsey and Jersey are receiving a lot of pressure to follow suit.
MPs from the British Parliament demand better oversight since offshore centers have been accused of activities of money laundering. Mr Zuluaga’s report, however, suggested that those who criticize offshore centers are not specific when it comes to their demands for better transparency and accountability. The report also gives an example of Jersey and how it has complied with international monetary and financial standards. The reports also say that Jersey has received better ratings than the US and the UK regarding accountability and transparency.