5 ways super-rich and wealthy businessmen in Africa escape paying taxes
This is not a criminal offence , but it is a moral crime.
With the massive document leak called the Paradise Papers, as well as the Panama papers of 2015, the medium through which these individuals protect their wealth from tax authorities show the geniuses of these individuals.
Although it is never a crime in the international laws to operate these accounts, it posed more moral burdens on these people that are expected to give back to the countries which made them wealthy.
The list of Africans on these infamous lists include Nigeria’s Central Bank governor – Mr Godwin Emefiele, Senate President of Nigeria, Dr Bukola Saraki to other successful business managers in the Africa.
In detailed diagrams by Quartz, these are ways individuals and corporation funnel their income to a safe haven and avoid paying the due taxes without committing any punishable crime.
1. Set up an Offshore company in Tax Haven
One of the commonly adopted means of avoiding tax payments is to set-up an offshore company in some of the tax havens across the globe. These tax havens are mostly in the South-American region and in some of the island countries.
These are the major medium used to protect personal income and capital gains from needed income taxes in countries of operational activities.
2. Buy UK properties through a Luxemburg subsidiaries
Many African businessmen and rich individuals also buy properties in the United Kingdom as a way of protecting their income from being taxed. Companies with subsidiaries in Luxemburg are used to buy these properties.
The tax allowance agreement between the United Kingdom and Luxemburg made these companies to earn income on these properties without paying needed capital gain taxes.
3. Form a Corporate Venture in Netherlands or United States of America
A common medium also used to get their funds/wealth protected is to link the money to a venture company in either Netherlands or United States of America.
Also Read: Saraki insist he has no secret assets
4. Buying vacation homes in Barbados
Purchasing a home in Barbados is the most effective after using a venture company in Holland or United States of America to buy a jet.
5. Buy a jet and set up a leasing company in the Isle of Man
Many of the wealthy individuals in Africa use a combination of purchasing jet and having a company in Isle of Man to serve a leasing company to their fleet of jets.
As a result, this income accruing to the operation of the jet is made tax free. This also extends to other income generating activities of the established leasing company.
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