Why are they tax havens?
It is tax haven because people move their business and their money there because they won’t pay tax there. In such places, the burden of tax is determined by residency. You will work in Nigeria everyday and have your residence in one of this haven. If the state government asks you for tax, you say I am sorry sir; I don’t reside in Nigeria, even though you make your money here. If you have tax haven and you have money, you employ smart lawyers and smart accountants and you will take advantage of the loopholes in the tax law. The reason for the cat and mouse game between the taxpayer and the tax authority is not far fetched; if you have money, you get good accountant and lawyer to plan your tax. This is where tax avoidance comes in. You are not evading, you are avoiding. You can make billions and billions in Nigeria and you don’t pay kobo to Nigeria government. That is because you are not residing in this country. However, the incidence of VAT has proved to be highly successful since its
