HKUST IEMS Thought Leadership Brief No. 39
Offshore tax evasion and avoidance represent a serious threat to the financial and reputational integrity of the BRI. Most BRI countries are not party to either of the two global standards for financial and tax transparency, which leaves them particularly vulnerable to the threat. China’s single-minded focus on reducing tax frictions for BRI cross-border investment has led it to emphasize other tax priorities rather than financial and tax transparency, further exacerbating the threat. China should give high priority to financial and tax transparency in BRI countries, and lead the way by going beyond the two global standards wherever appropriate, such as through public disclosures and extensive non-reciprocal sharing of information.
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 Damgaard, Jannick; Elkjaer, Thomas and Johannesen, Niels. (2019) The Rise of Phantom Investments. International Monetary Fund, Finance & Development, Volume 56, Issue 3: 11-13. https://www.imf.org/external/pubs/ft/fandd/2019/09/the-rise-of-phantom-FDI-in-tax-havens-damgaard.htm
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This research is supported by the Strategic Public Policy Research Funding Scheme from the Central Policy Unit of the HKSAR Government. More >>
Michael Tyrala is a Postdoctoral Fellow at the HKUST Institute for Emerging Market Studies.
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