5) What are tax havens and explain why they pose a threat to nation’s security? Examine whether crackdowns on tax havens help recover taxes?(250 words)

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Topic– Internal security

5) What are tax havens and explain why they pose a threat to nation’s security? Examine whether crackdowns on tax havens help recover taxes?(250 words)

The hindu

Why this question

Tax havens often comes to mind when we talk of black money. It is a significant challenge for any nation, and the article presents an alternative viewpoint of dealing with tax havens, which needs examination.

Key demand of the question

The question expects us to explain what tax havens are and how do they impact a nation’s economy and security. Thereafter we need to evaluate the viewpoint expressed in the article given in the link which holds that crackdown on tax havens lead to lowering of ability to recover taxes.

Directive word

Examine – When you are asked to examine, you have to probe deeper into the topic,  get into details, and find out the causes or implications if any .

Structure of the answer

Introduction – Explain what tax havens are.

Body – Discuss the threat that tax havens pose to economy and security of nations through its role in tax evasion and money laundering. Thereafter, we need to examine whether our method of dealing with tax havens helped us in resolving issues, or whether we need to think of alternatives to dealing with tax havens