The Indian government’s recent effort to extradite bank fraudsters and billionaire absconders from Antigua and England is only the tip of a titanic iceberg involving tax havens and corruption.

The London-based Tax Justice Network estimates secretive offshore wealth worldwide to be a stunning $32 trillion.

Governments lose about $500 billion in tax revenue annually through offshore bank accounts, according to the advocacy group.

British overseas territories like Jersey and Cayman Islands help hide ill-gotten wealth of corporate fraudsters, besides laundering black money through trusts and shell companies.

Hedge funds then covert this stashed loot into more billions of dollars through global stock market manipulation. Besides, exposes in the Panama Papers (11.4 million documents) and Paradise Papers (13.4 million documents), forensic audit of leading companies and “billionaires” reveal interesting truths.

The modern version of the merry rogue Jack Sparrow and his cinematic Pirates of the Caribbean do their looting and pillaging by offering financial services in tax havens to those suffering the world’s worst disease: bottomless greed.

“Financial services” is a prominent industry in Caribbean tax havens, apart from tourism.

These touristy tax havens are countries or regions with secretive banking practices and without or with minimal taxes ~ no corporate tax, property tax, income tax, inheritance tax. Prominent tax havens include Cayman Islands, British Virgin Islands, Jersey, Bermuda, Channel Islands, the Bahamas, Panama, Dominica, Isle of Man, Nevis, Anguilla, Costa Rica, Belize, Barbados, Mauritius and Luxembourg.

The infamous banking secrecy of Switzerland is matched by countries like England, USA, Singapore and Germany with strict tax compliance rules for their citizens but a different tax-loose system for foreigners who can hold assets with secrecy.

Hypocritical governments attract dirty money and dodgy “billionaires”.

Tellingly, some of the biggest corporate and political crooks seek refuge in UK.

Clean corporate governance advocacy groups say major US multinationals have about $1.6 trillion parked offshore. Pfizer, IBM, Walmart, General Electric, Microsoft, Exxon Mobil, Chevron are among companies earning more than $4.2 trillion profits globally but which use tax havens to lower tax rates to about 25.9 per cent from the US statutory rate of 35 per cent.

Apple had Ireland as tax haven, while Goldman Sachs and Nike used Bermuda. “These havens affect far more than tax,” Nicholas Shaxson wrote in an International Monetary Fund paper.

“They provide an escape route from financial regulations, disclosure, criminal liability and more. Because the main corporate users of tax havens are large financial institutions and multinationals, the system tilts the playing field against small and medium enterprises, boosting monopolization and danger of financial instability in emerging market eco-nomies”.

Shaxson, who authored the book Treasure Islands on tax havens and John Christensen, a former economic advisor to the British tax haven Jersey, argued that tax havens are a curse to their own people~ a “paradox of poverty in the midst of plenty” as in oilrich Gulf states. Cost of living is very high in most tax havens where governmental revenue is mostly through one-time license fees and heavy taxes on imported goods.

Tax haven Bahamas has its approximately 3,90,000 citizens mostly living in capital Nassau where a townhouse costs $300,000 and $3 million for a single-family residence. Residents pay $300 monthly for electricity and water in a small apartment, taxi fares average $60 (Rs 4,450) per hour, a bread loaf $6 (Rs 445).

A meal for two costs $300 (Rs 22,220) in Dune restaurant at Nassau’s Ocean Club, the Four Seasons resort made famous in the 2006 James Bond film Casino Royale.

Measures like the Common Reporting Standard (CRS) in 2014 from the Organisation for Economic Co-operation and Development helped reduce tax haven villainy.

By July 2019, about 90 countries shared information on 47 million accounts worth about $5 trillion; bank deposits in tax havens reduced by 20 to 25 per cent.

The CRS has loopholes, say experts, as crooks can claim citizenship in tax havens and escape banking transparency laws. But in a “paradox of hell in paradise” crooked billionaires live in daily dread of being caught.