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Havens crackdown: Momentum builds for tax transparency

20 June 2013   (0 Comments)
Posted by: Author: Vanessa Houlder
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Author: Vanessa Houlder

The 2013 summit has the potential to go down in history as the turning point in the battle against tax evasion and avoidance, according to David Cameron, UK prime minister.

He has called on governments to break down the walls of corporate secrecy by introducing central registers for corporate ownership. Talks will also focus on the cross-border sharing of tax information and whether companies should be encouraged to report what they pay in the countries in which they operate on a voluntary basis.

Because of growing public anger over high-profile examples of avoidance and evasion, European leaders have backed an international tax crackdown. In April François Hollande, Frances president, said tax havens must be eradicated worldwide after a political scandal involving a secret account held by his former budget minister. This year Angela Merkel committed to finally putting an end to tax havens at the G8 meeting.

Developing countries also want change. Kofi Annan, former secretary-general of the UN and chairman of the Africa Progress Panel, said: The extensive use made by foreign investors of offshore-registered companies operating from jurisdictions with minimal reporting requirements actively facilitates tax evasion. It is all but impossible for Africas understaffed and poorly resourced revenue authorities to track real profits through the maze of shell companies, holding companies and offshore entities used by investors.

Jeffrey Owens, former head of tax at the Paris-based Organisation for Economic Co-operation and Development, says tax has the potential to be the last trade barrier. Transparency is central to developing countries achieving self-sustaining growth, as it enables them to counter tax evasion capital flight and corruption, which flourish in an opaque environment.

For the story, go here.


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