South African billionaire Mark Shuttleworth has recently won an important case against the South African Reserve Bank in the Supreme Court of Appeal. The SCA ordered the Central Bank to repay Shuttleworth around £14m, which was levied to allow him to move £235m worth of his assets to the Isle of Man, a tax-efficient British Crown Dependency in 2001. South Africa has strict capital control rules, which maintains the amount of capital available to local borrowers, but Shuttleworth has stridently contended for the past few years that SA's exchange controls are "unconstitutional", "out-of-date", inhibit growth and competitiveness, and make money for South Africa's banks. His victory has been lauded in the business press and by wealthy South Africans, and Shuttleworth has been congratulated for taking on the government. However, this is an incomplete view of the long-term effects of capital outflows as well as of capital controls in general. It also ignores the fact that Shuttleworth's assets are domiciled in a tax haven. Nicholas Shaxson of the Tax Justice Network and author of Treasure Islands: Tax Havens and the Men who Stole the World also takes this view. Says Shaxson: '...it's essential to view this from an economic perspective. From [...]
[view whole blog post ]