Lesson 13 Flashcards
What has globalisation revolutionised?
global trade, finance and movement of labour
What is the Washington Consensus?
A belief that economic efficiency can only be achieved if regulations are removed
Why has there been a reduction in governmental role in the economy?
Deregulation become a trend in the 1970s and 1980s, with State interference being reduced or removed altogether.
How have governments have expanded their lack of financial regulation?
Low income/corporation tax to attract wealthy citizens
What is a tax haven?
A country or independent area where taxes are levied at a low rate. If you invest your money in these countries you will pay less tax than investing your money in the UK
Examples of country tax havens? (5)
Africa: Liberia Europe: Austria SA: Chile Middle East: Bahrain Asia: Malaysia
Examples of tax havens/avoidance?
Corporate taxes 10% in Switzerland but UK20%. In 2010 petrochemical company Ineos moved headquarters from UK to Switzerland – corporate migration with saved £0.5bn over 5 years
Why is transfer pricing used?
To reduce tax burden by routing profits to a subsidiary company in a low-tax state
How do wealthy expatriates limit personal tax?
by moving to a tax haven.
Government ministers in offshore tax haven argument for tax haven?
In favour, pay less tax
What is an expat?
A person who lives outside native country
Expat argument for tax haven?
Paying less tax
Improve area where they live, better standard of living
Expat argument against tax haven?
If poor living in tax haven can cause issues they can’t afford.
CEO of TNC argument for tax haven?
Pay less tax, save money more profitable
CEO of TNC argument against tax haven?
May damage reputation (unethical)
Morally incorrect to not invest in own country as taxes help run services
