By stigmatizing low tax jurisdictions as “tax havens,” the system unwittingly admits that taxation is an unpleasant, oppressive, and aggressing force, especially considering today’s overcomplicated and burdensome tax regimes.
The system further admits that non–tax havens, places with what is considered “normal” taxation, are in fact obnoxious and overbearing tax regimes that compel those who are able and willing to escape to a haven—a place of safety and tranquility. That being so, one can contend that ultimately the phrase “tax haven” has been introduced to dupe the public, stigmatize low-tax jurisdictions, and legitimize oppressive tax regimes.
https://mises.org/wire/if-mauritius-tax-heaven-other-african-countries-must-be-tax-hells
It is common for commentator to point to corruption, incompetence, malicious Western meddling, and other factors as the source of Africa’s continued economic woes. One seldom hears so-called experts point to taxes as a major impediment to economic development. Even “development economists” do not repudiate Africa’s paradoxically onerous tax regimes.
Worse still, powerful (and harmful) neocolonialist institutions, such as the International Monetary Fund (IMF), tend to “advise” African governments to expand tax schedules and to increase tax rates further as government debt levels grow dangerously high across Africa. Refreshingly, Mauritius has taken a different approach by implementing a relatively low and attractive tax code. Unsurprisingly, Mauritius has been denounced for its low tax posture, calling it a “tax haven.”
Tax Haven? Not Really
There is no such thing as a tax haven. “Tax havens” should, in truth, be called less tyrannical tax countries. Such jurisdictions have been deliberately labeled “tax havens” to stigmatize them in a time when heavy taxation is the norm.
Perspective and context matter. From the standpoint of governments, it makes a great deal of sense to demonize and undermine jurisdictions that maintain relatively straightforward tax codes and low tax rates for two reasons: first, to prevent “tax havens” from gaining much traction or acceptance; second, because the proliferation of “tax havens” exposes the fact that today’s “normal” tax types and rates amount to tyrannical taxation. Therefore, the more stigmatized “tax havens” are, the more unacceptable they will appear to the general public (as statist pundits largely shape public opinion) and the more legitimacy governments will attain to tax more.
The word “haven” means a place of safety or refuge. An oasis in the desert. A warm shelter in a snowy winter. Semantically, a haven is a thing or place that provides safety, security, or protection from an unpleasant, dangerous, or aggressing force. By stigmatizing low tax jurisdictions as “tax havens,” the system unwittingly admits that taxation is an unpleasant, oppressive, and aggressing force, especially considering today’s overcomplicated and burdensome tax regimes.
The system further admits that non–tax havens, places with what is considered “normal” taxation, are in fact obnoxious and overbearing tax regimes that compel those who are able and willing to escape to a haven—a place of safety and tranquility. That being so, one can contend that ultimately the phrase “tax haven” has been introduced to dupe the public, stigmatize low-tax jurisdictions, and legitimize oppressive tax regimes.
Mauritius has been criticized for being a “tax haven” in the African context. But Mauritius is not really a tax h(e)aven. We live in a world characterized by convoluted and tyrannical taxation—a world of tax hells—so introducing the concept of “tax haven” was desirable and helpful to the system. Mauritius is a “tax h(e)aven” only insofar as African (and other) countries are tax hells.
It is plausible that most individuals and businesses would much rather reside in a tax h(e)aven than in a tax hell. This is not greed. It is human nature to want to keep as much of what one has earned as possible. That is why a simple and light tax burden is naturally alluring.
Africa’s Tyrannical Taxation
According to Business Insider Africa:
Corporate tax rates are generally higher in developing countries. In Africa, the average corporate tax rate is 27.5%—the highest of any region. Chad, Comoros, Equatorial Guinea, Guinea, Sudan, and Zambia all tie for the second-highest corporate tax rate in the world at 35.0%. Many countries in the region also rank as the worse for ease of doing business, with high start-up costs and multiple barriers to entry.
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