system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why do tax havens exist/places with very lax taxation laws? What does the government gain from allowing tax havens?
gpt
They collect taxes for being able to live/harbor money there, but those taxes are far lower than what another country might take as part of an income/capital gains tax. Still, if you're skimming (lets arbitrarily say) 5%-10% of a bunch of multi-millionaires/billionaire's hoarded money, you're making a fortune. When you consider it from the standpoint of the person hiding their money, 5%-10% is *way* less than 50%+ in a country like the UK, so it's a good deal for them (assuming they have no conscience).

As for why a government like the UK would allow for their citizens to use tax havens, the answer is that the government is generally controlled or lobbied by people using those tax havens.