09/12/2011 Social Affairs, Health and Sustainable Development
Strasbourg, 09.12.2011 - "As a result of the inherent lack of transparency, no-one really knows how much public money is siphoned out via tax havens; by various estimates the amounts add up to trillions", according to Dirk Van der Maelen (Belgium, SOC), rapporteur on policy on tax havens, speaking today when he opened a Paris hearing on the subject organised by the PACE Committee on Economic Affairs.
According to the rapporteur, a 2010 IMF study estimated that the accounts of small island financial centres alone registered financial flows of least US$ 18 trillion, about a third of the world’s cumulative GDP. The IMF also estimates that up to US$ 1.5 trillion of criminal money is laundered every year in the global financial system involving tax havens.
Participants emphasised the need for international organisations and national policy-makers to pay greater attention to multiple problems stemming from secrecy, lax regulatory frameworks and provisions enabling fiscal dumping, which are in-built characteristics of tax havens. In fact, the OECD considers that international efforts against tax evasion and non-co-operative tax havens have so far enabled twenty countries to recuperate at least €14 billion over the last two years; yet much more tax revenue can potentially be recovered through co-ordinated action.
As there are serious doubts about the effectiveness of "upon request" information exchange for tax purposes, states should start moving to automatic information exchange, subject to appropriate safeguards for personal data protection. The OECD could be a good starting point to begin building the "coalition of the willing" on a global scale and to step up pressure on tax havens to become more co-operative in this respect.
In the meantime, Council of Europe member states that have not yet joined the Global Forum (on Transparency and Exchange of Information for Tax Purposes) should be urged to become members. Legal provisions permitting the holding of anonymous accounts, off-balance-sheet book-keeping and bearer shares should be abolished.
Among the participants were Donal Godfrey, Deputy Head of the Global Forum on Transparency and Exchange of Information for Tax Purposes, OECD; Philip Kermode, Director for Direct Taxation, Tax Coordination, Economic Analysis and Evaluation, European Commission; John Christensen, Director of the International Secretariat, Tax Justice Network; and Clemens Fuest, Research Director of the Oxford University Centre for Business Taxation.