Mar 05, 2009
The world's most secretive tax havens are to be prised open after Barack Obama's new administration endorsed far-reaching legislation to crack down on them.
The
decision to force "secrecy jurisdictions" to reveal the identities of
the super-rich and major corporations who use them came from the US
treasury secretary, Timothy Geithner, at a congressional hearing and will be seen as a blow to places such as Jersey, the Cayman Islands and Switzerland.
"We
fully support the legislation ... on offshore tax centres, and we look
forward to working with you as part of the broader effort to address
international tax evasion and close the tax gap," Geithner told the
House ways and means committee late on Tuesday.
His commitment
was followed by supportive comments from Gordon Brown during his speech
to Congress yesterday. But the prime minister will come under intense
pressure to resist the move from the City and the tax havens that are
UK dependencies or overseas territories. Britain has recently faced
international criticism for blocking European measures to reveal
details of those who deposit huge wealth in tax havens. The Guardian's
Tax Gap series last month examined the extent of tax avoidance by big business.
With
an estimated $13tn (PS9tn) of untaxed wealth held in offshore centres,
taxing them would add $255bn of revenue to governments - more than
double the global aid budget to poor countries.
Key measures in
the new legislation, now likely to be in force within 12 months,
include revealing the beneficiaries of secretive trusts and identifying
"offshore secrecy jurisdictions" that "unreasonably restrict US tax
authorities from obtaining needed information" as well as severely
increasing penalties against tax evaders and closing numerous loopholes.
Senator
Carl Levin, who along with Obama introduced similar legislation in
recent years only for it to be thwarted by George Bush, said:
"President Obama's support for the Stop Tax Haven Abuse Act, as
announced by treasury secretary Geithner, is very welcome news and
greatly improves the chances of an offshore tax bill becoming law this
year. It also sends a strong signal to tax havens that this
administration is not going to tolerate the kind of offshore tax abuses
that have been draining $100bn a year from the US treasury and that, as
a result, offload the tax burden on to the backs of honest taxpayers."
The
US underlined its intent last month when it demanded that the Swiss
bank UBS surrender the names of 52,000 American account holders in a
case that threatens to end centuries of Swiss bank secrecy. Geithner's
comments come as European leaders grow increasingly agitated at how tax
havens have fostered secrecy that has contributed to the collapse of
banks the world over. "We want to put a stop to tax havens," France's
president, Nicolas Sarkozy, said recently. "We want results on this,
with a list of tax havens and a series of consequences."
Raymond
Baker, director at the Washington-based thinktank Global Financial
Integrity, said: "This is a pivotal time in global finance. From the
European commission's recent adoption of measures to improve
co-operation between EU member states and increase transparency in tax
assessment and collection to the G20's stated intent to crack down on
tax havens when they meet in April, calls around the world are growing
for definitive action on the problem of tax havens."
But Geoff
Cook, chief executive of Jersey Finance, which promotes the island as
an international finance centre, said: "We believe we have nothing to
fear because we are not a secrecy jurisdiction. We co-operate fully
with US authorities to exchange information in accordance with our
bilateral agreements."
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The world's most secretive tax havens are to be prised open after Barack Obama's new administration endorsed far-reaching legislation to crack down on them.
The
decision to force "secrecy jurisdictions" to reveal the identities of
the super-rich and major corporations who use them came from the US
treasury secretary, Timothy Geithner, at a congressional hearing and will be seen as a blow to places such as Jersey, the Cayman Islands and Switzerland.
"We
fully support the legislation ... on offshore tax centres, and we look
forward to working with you as part of the broader effort to address
international tax evasion and close the tax gap," Geithner told the
House ways and means committee late on Tuesday.
His commitment
was followed by supportive comments from Gordon Brown during his speech
to Congress yesterday. But the prime minister will come under intense
pressure to resist the move from the City and the tax havens that are
UK dependencies or overseas territories. Britain has recently faced
international criticism for blocking European measures to reveal
details of those who deposit huge wealth in tax havens. The Guardian's
Tax Gap series last month examined the extent of tax avoidance by big business.
With
an estimated $13tn (PS9tn) of untaxed wealth held in offshore centres,
taxing them would add $255bn of revenue to governments - more than
double the global aid budget to poor countries.
Key measures in
the new legislation, now likely to be in force within 12 months,
include revealing the beneficiaries of secretive trusts and identifying
"offshore secrecy jurisdictions" that "unreasonably restrict US tax
authorities from obtaining needed information" as well as severely
increasing penalties against tax evaders and closing numerous loopholes.
Senator
Carl Levin, who along with Obama introduced similar legislation in
recent years only for it to be thwarted by George Bush, said:
"President Obama's support for the Stop Tax Haven Abuse Act, as
announced by treasury secretary Geithner, is very welcome news and
greatly improves the chances of an offshore tax bill becoming law this
year. It also sends a strong signal to tax havens that this
administration is not going to tolerate the kind of offshore tax abuses
that have been draining $100bn a year from the US treasury and that, as
a result, offload the tax burden on to the backs of honest taxpayers."
The
US underlined its intent last month when it demanded that the Swiss
bank UBS surrender the names of 52,000 American account holders in a
case that threatens to end centuries of Swiss bank secrecy. Geithner's
comments come as European leaders grow increasingly agitated at how tax
havens have fostered secrecy that has contributed to the collapse of
banks the world over. "We want to put a stop to tax havens," France's
president, Nicolas Sarkozy, said recently. "We want results on this,
with a list of tax havens and a series of consequences."
Raymond
Baker, director at the Washington-based thinktank Global Financial
Integrity, said: "This is a pivotal time in global finance. From the
European commission's recent adoption of measures to improve
co-operation between EU member states and increase transparency in tax
assessment and collection to the G20's stated intent to crack down on
tax havens when they meet in April, calls around the world are growing
for definitive action on the problem of tax havens."
But Geoff
Cook, chief executive of Jersey Finance, which promotes the island as
an international finance centre, said: "We believe we have nothing to
fear because we are not a secrecy jurisdiction. We co-operate fully
with US authorities to exchange information in accordance with our
bilateral agreements."
The world's most secretive tax havens are to be prised open after Barack Obama's new administration endorsed far-reaching legislation to crack down on them.
The
decision to force "secrecy jurisdictions" to reveal the identities of
the super-rich and major corporations who use them came from the US
treasury secretary, Timothy Geithner, at a congressional hearing and will be seen as a blow to places such as Jersey, the Cayman Islands and Switzerland.
"We
fully support the legislation ... on offshore tax centres, and we look
forward to working with you as part of the broader effort to address
international tax evasion and close the tax gap," Geithner told the
House ways and means committee late on Tuesday.
His commitment
was followed by supportive comments from Gordon Brown during his speech
to Congress yesterday. But the prime minister will come under intense
pressure to resist the move from the City and the tax havens that are
UK dependencies or overseas territories. Britain has recently faced
international criticism for blocking European measures to reveal
details of those who deposit huge wealth in tax havens. The Guardian's
Tax Gap series last month examined the extent of tax avoidance by big business.
With
an estimated $13tn (PS9tn) of untaxed wealth held in offshore centres,
taxing them would add $255bn of revenue to governments - more than
double the global aid budget to poor countries.
Key measures in
the new legislation, now likely to be in force within 12 months,
include revealing the beneficiaries of secretive trusts and identifying
"offshore secrecy jurisdictions" that "unreasonably restrict US tax
authorities from obtaining needed information" as well as severely
increasing penalties against tax evaders and closing numerous loopholes.
Senator
Carl Levin, who along with Obama introduced similar legislation in
recent years only for it to be thwarted by George Bush, said:
"President Obama's support for the Stop Tax Haven Abuse Act, as
announced by treasury secretary Geithner, is very welcome news and
greatly improves the chances of an offshore tax bill becoming law this
year. It also sends a strong signal to tax havens that this
administration is not going to tolerate the kind of offshore tax abuses
that have been draining $100bn a year from the US treasury and that, as
a result, offload the tax burden on to the backs of honest taxpayers."
The
US underlined its intent last month when it demanded that the Swiss
bank UBS surrender the names of 52,000 American account holders in a
case that threatens to end centuries of Swiss bank secrecy. Geithner's
comments come as European leaders grow increasingly agitated at how tax
havens have fostered secrecy that has contributed to the collapse of
banks the world over. "We want to put a stop to tax havens," France's
president, Nicolas Sarkozy, said recently. "We want results on this,
with a list of tax havens and a series of consequences."
Raymond
Baker, director at the Washington-based thinktank Global Financial
Integrity, said: "This is a pivotal time in global finance. From the
European commission's recent adoption of measures to improve
co-operation between EU member states and increase transparency in tax
assessment and collection to the G20's stated intent to crack down on
tax havens when they meet in April, calls around the world are growing
for definitive action on the problem of tax havens."
But Geoff
Cook, chief executive of Jersey Finance, which promotes the island as
an international finance centre, said: "We believe we have nothing to
fear because we are not a secrecy jurisdiction. We co-operate fully
with US authorities to exchange information in accordance with our
bilateral agreements."
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