Are tax havens really all bad?

By Pascalis Raimondos, Professor of Economics, Head of School, Queensland University of Technology &
Sara L. McGaughey, Professor of International Business, Griffith University
The recently released Paradise Papers have again turned the media spotlight on small tax havens. The only difference from last year’s Panama Papers is that the contracts leaked to the public are from a respectable law firm in Bermuda (Appleby), and not from a suspicious and less-known firm in Panama (Mossack Fonseca). Otherwise, the key message is the same; individuals and firms use the services of tax havens to avoid paying taxes in their own countries. Appleby’s media response was shift and clear: there is nothing illegal in their actions. In short, Appleby uses tax law loopholes that allow individuals and firms to transfer their wealth in countries where taxation is zero.
The immediate reaction by some was that we should regulate and close these loopholes. That is the traditional

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