Pacific tax havens at risk: report

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Flags of Pacific nations. A new report has warned of implications for some the Pacific's off shore finance centres. [Department of the Prime Minister and Cabinet]

Jemima Garrett

Last Updated: Thu, 27 Aug 2009 15:34:00 +1000

The international campaign against tax havens has driven three Pacific Island nations' off-shore finance centres out of business, according to a new report.

The report, by the Pacific Legal Network, warns of serious implications for the remaining centres in Samoa, Vanuatu and the Cook Islands.

Six Pacific nations are on the "Tax Haven Grey List" run by the Organisation for Economic Co-operation and Development (OECD).

The Pacific Legal Network says conditions imposed by the OECD have forced Niue, Nauru and the Marshall Islands to close down their off-shore finance centres.

Kim Ralston, the Pacific Legal Network's tax haven expert, says Pacific countries must get off the OECD Grey List if they want to keep their finance centres.

"Pacific Island countries really need to undertake a cost-benefit analysis and to determine whether it is worth retaining their offshore financial centres in light of the increased regulation costs," she said.

She says the countries must also consider whether they are worth keeping "in light of the stigma attached to them and how that might actually affect their economy."