TAX HAVEN AND THEIR IMPACT ON FINANCIAL

DEMOCRACY

BY

ADITI SINGH

Tax havens are places that have created special tax rules that allow
operators such as companies to pay little or no taxes. The tax havens can be
very secretive, making them attractive for operators that want to avoid paying
taxes to their home countries, as well as for those that want to hide away
money gained through corruption.

Norway economic policy is designed to stabilize and counteract

unemployment and inflation, to stimulate growth and to influence the structure
of industry and the distribution of income. Regions with little industry are
subject to more lenient taxation than other areas, and credit institutions have
been established to provide support to the regional industrial sector. The
purpose of these schemes is to promote innovation, maintain traditional
industry or prevent the sudden disappearance of local industry.

Since ten years, and more so, since September 11, 2001, international
organizations such as the IMF, OECD and EU try to combat harmful tax
competition, money laundering and terrorist financing.
The number of agreements completed by Norway and the Nordic project
marks a further significant step forward in international efforts to implement
standards of transparency and exchange of information in tax matters,
developed by the OECD's Global Forum on Taxation. The Nordic project has
received favourable attention from the OECD for its work. The project is an
example of the way in which OECD countries can work together on
international taxation matters generally and the avoidance of international tax
evasion particularly.
 Norway has followed up on the OECD's work against international tax
evasion. In order to strengthen their negotiating position in relation to tax
havens and minimize the costs of negotiation, the Nordic countries
coordinated negotiations under the auspices of the Nordic Council of Ministers
in 2006. In addition, the Norwegian Ministry of Finance expects that
agreements with Aruba and the Netherlands Antilles will be completed shortly.
Negotiations are planned with the Bahamas, Mauritius, the Seychelles,
Gibraltar and Andorra. Also, A new commission has been appointed by
Norway which will investigate ways of putting a stop to the huge flows of
money into tax havens.

According to progress report on the jurisdictions surveyed by the

OECD global forum in implementing the internationally agreed tax standard,
Norway has successfully implemented the internationally agreed tax standard.
Norway has been included in the white list of the jurisdictions that successfully
implemented the international tax standard.