Top economists lobby world leaders to end tax haven secrecy

The call comes after the Panama Papers leak. Picture: AFP/Getty

Signatories also include best-selling inequality expert  Thomas Piketty, as well as Cambridge economist Ha-Joon Chang.

The letter comes ahead of the UK government’s anti-corruption summit in London on Thursday, which politicians from 40 countries as well as World Bank and IMF representatives will attend.

The letter, co-ordinated by charity Oxfam, says: “We urge you to use this month’s anti-corruption summit in London to make significant moves towards ending the era of tax havens. The existence of tax havens does not add to overall global wealth or well-being; they serve no useful economic purpose.

“Whilst these jurisdictions undoubtedly benefit some rich individuals and multinational corporations, this benefit is at the expense of others, and they therefore serve to increase inequality.”

The letter claims poorer countries are hit the hardest by tax dodging, losing $170 billion dollars (£117bn) a year.

The group, which includes 47 professors from British universities, urged governments to “lift the veil of secrecy surrounding tax havens”, and singled out the UK in particular.

“We need new global agreements on issues such as public country by country reporting, including for tax havens.  Governments must also put their own houses in order by ensuring that all the territories, for which they are responsible, make publicly available information about the real ‘beneficial’ owners of company and trusts.

“The UK, as host for this summit and as a country that has sovereignty over around a third of the world’s tax havens, is uniquely placed to take a lead.”

Oxfam said more than half the companies set up by Mossack Fonseca, the law firm in the Panama Papers leak, were incorporated in British Overseas Territories such as the British Virgin Islands.

Jeffrey Sachs, director of Columbia University’s Earth Institute and an adviser to UN Secretary General Ban Ki-moon, said: “Tax havens do not just happen. The British Virgin Islands did not become a tax and secrecy haven through its own efforts.”