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The Transparency Tax : Discouraging Firm Ownership via Tax Havens

Author

Listed:
  • Brounstein, Jakob
  • Bachas, Pierre
  • Bajaña, Alex

Abstract

Tax havens weaken tax enforcement by obscuring firm ownership and facilitating offshore evasion. This paper studies a reform in Ecuador that imposed a corporate tax surcharge on firms with owners in tax havens, using a newly available ownership registry. Comparing haven-owned firms to other foreign-owned firms, the analysis finds that the reform reduced haven ownership by 12 percentage points, largely through disclosure of non-haven individual owners. Exposed firms reduced transactions with tax havens and increased corporate tax payments, with no detectable effects on investment or firm size. The results suggest that ownership transparency can meaningfully improve tax compliance at limited efficiency cost, even through unilateral action.

Suggested Citation

  • Brounstein, Jakob & Bachas, Pierre & Bajaña, Alex, 2026. "The Transparency Tax : Discouraging Firm Ownership via Tax Havens," Policy Research Working Paper Series 11493, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11493
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