Regulating havens: The role of hard and soft governance of tax experts in conditions of secrecy and low regulation

Abstract

International tax governance is significant societally as it impacts both inequality and the capacity of governments to deliver on their social contracts. Tax experts forma key, under‐researched, heterogeneous element of the tax ecosystem, subject to a range of hard and soft governance influences. While problematic tax regimes are appropriately identified by reference to lax regulation or financial opacity, few empirical studies explore how operating in these jurisdictions affects the governance of tax experts individually. Using international survey data, we find that the influence of soft governance on tax experts varies across conditions of secrecy or lax regulation. Soft governance, including that of the workplace and the profession, is most influential in challenging regimes. Beyond a tipping point of economic freedom, regulatory knowledge and the threat of sanction become less influential. Elements along the continuum between hard and soft governance interact in a non‐homogenous way that indicates a role for professional bodies and firms in tax governance.

Taxation: A Regulatory Multilevel Governance Perspective

“…Killian et al . (2020) as well as Christensen et al . (2020) focus on the role of tax professionals in transnational settings that may either subvert or stabilize the integrity of national tax systems.…”

“…(2020) and by Killian et al . (2020) in this issue. Finding loopholes in international tax law is not an easy task, it requires specialized knowledge, in particular expertise in diverse national tax laws.…”

“…(2020) and Killian et al . (2020) exemplify. Intermediaries' conflicts of interest challenge the effectiveness, honesty, and fairness of the tax system.…”

“…Killian et al . (2020) focus on the attitudes and tax morale of tax advisors working in so‐called tax havens or secrecy jurisdictions. They conducted a large international survey among 1,061 professionals in 59 countries analyzing how secrecy and the laxity of the regulatory environment impact on their beliefs.…”

Is Panama really your tax haven? Secrecy jurisdictions and the countries they harm

“…2022; Killian et al . 2022). This approach allows us to better identify the potentially crucial role of power vested in the OECD and its dependencies in maintaining colonial types of economic domination and extraction.…”