Financial Crisis: Trouble in tax paradise
29 October 2009
The Guardian warns that some of Britain’s tax havens may become the latest victims of the financial crisis. Tomorrow will see the publication of an economic healthcheck of the UK’s overseas territories and crown dependencies including Jersey, the Isle of Man and the Cayman islands, which indicates that all is not well in paradise.
Having been criticized for the their role in the economic meltdown, some of the tax havens are now experiencing problems of their own. The daily reports that revenues from financial services and fees from banks have declined to the point where the Cayman Islands had “to beg the Foreign Office for permission to raise a £280m bank loan.” Worse still, some British officials are concerned that poorer territories in the Caribbean, which have been affected by a reduction in US tourism, “could become failed states and be dragged into the illegal drugs trade.” The report is expected to emphasize that there will be no bailout financed by the UK, offshore financial centres will simply have to raise taxes to survive the economic crisis.