Presented Essay Example | Topics and Well Written Essays - 500 words

Presented - Essay Example These territories are considered â€Å"black hole† of finance because of its notoriety of hiding money to escape from taxes. UK Prime Minister David Cameron acknowledged that tax evasion cost governments billions if not trillion of tax revenues. These revenues which could have been used to finance a lot of things from human development to stimulating the economy had been foregone due to tax evasion. For example, the trillions of dollars being channeled in UKs offshore territories could have netted hundreds of millions of dollars had they been legally taxed. They could have been used to finance education in poor countries to break the cycle of poverty, or to inject funds in social services in countries where malnutrition is acute to save lives. It could also be used to finance a budding business to create value, jobs and further revenue for the government. If tax evasion becomes very pervasive, government will lost its source of revenue to fund the performance its many roles and in effect, will become ineffective. Thus, human development will stagnate because positive interventions will not materialize due to the lack of funds. The poor will remain poor or even become poorer and the rich will remain rich and even richer. Tax evasion can be done legally by several means. One of the legal tax avoidance that is often resorted to through the shifting of profits to jurisdictions that do not levy corporate tax which UKs offshore territories are notorious. Taxation serves as an equalizer to take money from those who have it to fund human development. UKs offshore territories defeat this purpose by serving as tax haven for the mega rich which would have been taxed had they been more transparent in their transactions. These explain why it is such an issue when UK Prime Minister David Cameron announced that they will be tackling tax evasion and transparency in the next G8 summit because his country is guilty of providing tax havens both to corporations