This technical report aims at investigating and analyzing the statistical side of the Corporate Tax Haven Index (CTHI). The CTHI methodology is coherent and thoroughly considered by experts of tax evasion. We found that the differences in scoring of indicators influences their distributions, their correlation with other indicators and all these influences the final CTHI scores and rankings. Hence, CTHI developers may wish to consider the use of further quantitative indicators suggested in earlier empirical studies, which are less exposed to the subjectivity of scoring and distributed on a continuous scale. We suggest on the basis of our audit to weigh up the possibility of using a geometric average, as it may better reflect the non-compensatory nature of tax avoidance. In general, the CTHI is found to be robust, top ten ranked countries of the CTHI are in the top of other lists of tax havens in recent studies, applying different empirical methods for the identification. As recommended by the JRC team in its Financial Secrecy Index (FSI) audit, it would be worthwhile to publish confidence intervals alongside the ranking.
ERHART Szilard;
2020-08-06
Publications Office of the European Union
JRC121296
978-92-76-20909-6 (online),
1831-9424 (online),
EUR 30321 EN,
OP KJ-NA-30321-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC121296,
10.2760/601301 (online),
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