Investment
Opportunities only exist if it can produce returns on investment (ROI), after
paying its legitimate obligations. It must offer Capital Gains – growing the
investment value and Dividends Payouts – paying for the use of the investment
funds, generating a competitive yield. Such Investment Opportunities create
employment; salaries and wages along with its associated taxation, delivering
on individual management contracts and collective worker union agreements, similarly
spawn other opportunities and donate to the society. These Investment
Opportunities call on individuals and corporations, who, after many years of
work, have retained excess savings or wealth, to participate in building
operations, promising safer and greater ROI.
With limited access
to the aforementioned investors, countries and other tax collecting
jurisdictions compete, as Tax Havens, using various tax regimes inclusive of 0%
along with standard fiscal and monetary policies, for Direct Foreign Investment
to fund their development programmes. Inviting foreign corporations, with
expertise and experience in the extractive or agribusiness sector, to bid to
explore and develop geographic areas is common place. The same is offered to
foreign individuals migrating with their pension or savings wishing to buy real
estate or open a small operation. Both the corporation and individual can
legally, following local lawyers’ advice, open and operate bank accounts to
facilitate their activities, with or without declaring the source of funds or
hiding the true ownership of the funds. This is what can negatively label a
jurisdiction as Not in Compliance with International Financial Regulation.
The term ‘Secret
Bank Account’ is a misnomer since all bank accounts, foreign or local, unless
confronted with a local court order all banking transactions are secret. In
jurisdictions where tax evasion is taking place, the root of the problem is
income that someone is not entitled too; bribery of elected or selected Public Officials,
undeclared earnings from illegal activities, Money Laundering, Post Politics
Profits, etc. all requiring hiding from local authorities. Financial
Transparency seeks to trace the process of criminal activities and its
beneficiaries across borders as evidence in a prosecution. Without suspecting a
crime, the only thing to guard against is Political Perception. Entitled Income
legally paid in a jurisdiction with a lower or no tax charge, in the case of;
an employee on foreign secondment, or sale revenue generated from and retained
in a foreign jurisdiction, is also common place and very legal.
No law firm or bank
employee should target its accountholders based on the balances held, or sell
information to a third party, for example; investigative journalists, vehicle
and insurance salespersons, or charities seeking contributors/donors. There are
legitimate security reasons for using anonymous bids at auctions; not wanting
to be tracked and targeted by hackers, kidnappers, conmen, etc. To avoid or
reduce any income taxation expenditure, there are tax credits designed in all
jurisdictions and made legal to fund activities and charities in communities,
engaged in social and development works. Works, which may not be high on the
agenda or that, is not able to access government funding.
Put simply,
Government policies will have greater results on tax revenue collection by
raising Taxes on Goods/Services; Import Duties, Consumption, Sale and Value
Added Taxes with no exempted or 0% rated items, which is individually
controlled and more efficient at collection than profit based/corporate taxes,
at the same time, expanding social services, such as; health and food cards, to
support and mitigate negative impacts. Such Government policies maybe better
served by strengthening its independent regulators; Integrity Commission,
Public Prosecution, Security Exchange Commission, Auditor General, Budget
Office, to secure public finances and reduce corruption. These Government
policies, as a consequence, will have greater results by lowering profit based
taxes to attract and encourage more foreign or local investment and jobs.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
