n Stellenbosch Law Review = Stellenbosch Regstydskrif - A critique on the OECD campaign against tax havens : has it been successful? A South African perspective

Volume 21, Issue 1
  • ISSN : 1016-4359
  • E-ISSN: 1996-2193



The globalisation of trade and integration of national economies has made many segments of national tax bases increasingly geographically mobile. These developments have induced some jurisdiction, such as tax haven jurisdictions to adopt tax regimes that distort financial and investment flows among countries resulting in the erosion of other countries' tax bases. Over the years, the OECD has been at the forefront of the campaign against the harmful tax practices of tax haven jurisdictions. In this regard, it has recommended certain legislation and policies that countries should adopt so as to stifle the development of tax havens. The OECD's efforts have however been heavily criticised and it is doubtful if its initiatives pose a threat to the existence of tax havens. Nevertheless, the OECD's initiatives have made it clear that the international community will not tolerate tax-haven harmful tax practices that deplete countries' tax bases. Indeed the threats and sanctions imposed on tax-haven jurisdictions have forced a number of them to amend their tax policies. Like other countries, South Africa's tax base gets depleted when its residents invest in tax haven jurisdictions. This article evaluates to what extent South Africa has aligned itself with the OECD recommendations in fighting the tax haven problem, and comes up with recommendations for more proactive measures.

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