Page 19 - DMGT548_GLOBAL_HRM

Global HRM

Notes ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and
Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999.

Tax havens

A tax haven is a state, country or territory where certain taxes are levied at a low rate or not at
all, which is used by businesses for tax avoidance and tax evasion. Individuals and/or corporate
entities can find it attractive to establish shell subsidiaries or move themselves to areas with
reduced or nil taxation levels. This creates a situation of tax competition among governments.
Different jurisdictions tend to be havens for different types of taxes, and for different categories
of people and/or companies. States that are sovereign or self-governing under international
law have theoretically unlimited powers to enact tax laws affecting their territories, unless
limited by previous international treaties. The central feature of a tax haven is that its laws and
other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions.

 nil or nominal taxes;
 lack of effective exchange of tax information with foreign tax authorities;
 lack of transparency in the operation of legislative, legal or administrative provisions;
 no requirement for a substantive local presence; and
 Self-promotion as an offshore financial centre.

The objectives of governments and of international organisations behind the promotion of
globalisation:
1. Free trade, peace, democracy: There’s no denying the fact that human beings who trade
with one another, who allow mutual equity stakes or financial investments to be made,
have better relationships both personally and politically. This results in avoiding or at
least reducing the risk of armed conflicts. Peace in the world becomes more secure and the
developing political systems come under increasing pressure to organise themselves in a
more democratic way. It is therefore almost immaterial whether the establishment of
peace and democracy is the main objective of the liberalisation of markets, as it is pursued
by international organisations (such as IMF, WTO) or by national governments, or whether
this is “only” a desirable, more or less automatic consequence of this process. Thus the
main motive of the founders of the European Union was reconciliation after the Second
World War, since the commercial benefits of the economic and currency union were not
altogether clear before. Only later did the “Ceccini Report” try to demonstrate in terms of
opportunity cost what the consequences of not uniting would be. They thought that at
latest, when the single currency was introduced, the unification of Europe would become
irreversible, and thereby long-term peace between the countries involved would be
secured. Even the upholding of human rights and the adherence to democratic structures
can be more effectively monitored by international organisations, if there are commercial
relations between the countries concerned. If additionally, the international conglomerates
apply pressure to uphold environmental and social standards in the manufacture of the
products which they sell world-wide, then it is likely that there will be further beneficial
effects both for environmental standards and for the quality of life among certain parts of
the population.
2. Prosperity: Similarly as companies necessarily work in their own interests, so also
governments naturally attempt to create or improve conditions for their own countries
and communities of countries by increasing exports (and as little imports as possible) in
order to:
 generate growth in their economies

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