Cameron Sets Out Case For Global Anti-Avoidance Action
29 April 2013
Posted by: Author: Robert Lee
Source: Robert Lee (Tax-News.com, London)
David Cameron has called on the European Union (EU) and G8 to "inject the political will" needed for tackling tax evasion and avoidance, recommending action in four key areas.
Writing to Herman Van Rompuy, President of the European Council, the UK Prime Minister describes the levels of tax revenue lost from such activities as "staggering." He wants "coordinated, truly global action," and sees the run up to June's G8 Summit as a timely opportunity to press forward with "radical" initiatives.
The first theme addressed in Cameron's letter is the use of the automatic exchange of information as a means of tackling evasion. He points to the introduction of the Foreign Account Tax Compliance Act (FATCA) by the US, agreements made by the UK with its Crown Dependencies, and the recent announcement that the UK France, Germany, Italy, and Spain are to pilot an exchange program, as significant steps. The UK has also requested that the Organization for Economic Co-operation and Development (OECD) report ahead of the Summit on the development of a universal standard.
Cameron hopes that when the Council meets next month, it will "give the strongest possible message of support from Europe for the rapid adoption of multilateral automatic information exchange as a new global standard, and encourage other jurisdictions to publicly commit to joining a multilateral system at the earliest opportunity."
On the need to "break through the walls of corporate secrecy," Cameron wants to see the EU and G8 work together on ensuring the full implementation of existing Financial Action Task Force standards on transparency in beneficial ownership. The G8 should also consider publishing action plans detailing the concrete steps that their governments will take to achieve this.
Similarly, in an effort to clamp down on profit shifting, Cameron explains that the G8 will "seek to provide high-level political support to the ongoing efforts in the OECD and G20 to identify problems and gaps in these existing rules, and to work up options for reform." The Council should support these efforts, he urges.
The final issue highlighted by Cameron is the ability of developing countries to collect taxes. The G8 and EU should follow the UK's lead in targeting their development assistance programs toward improving this capacity.
"I am confident that the upcoming European Council and the G8 Summit will be remembered as the turning point in the battle against tax evasion and avoidance and the restoration of confidence in the fairness and effectiveness of our tax systems," Cameron concludes.