There are growing warnings about the UK continuing with its policy of shielding its overseas territories from getting transparent financially and it is amidst this environment that the United nations has been called on by the Tax Justice Network to lead and set up a global effort to b=ring an end to offshore tax evasion and corruption.
There is strong voluntary unwillingness to reforms by big financial centers, said Alex Cobham, chief executive of TJN while speaking at the launch of the TJN’s Financial Secrecy Index 2018. This index ranks countries on the basis of the secretiveness and size of their offshore sectors.
“The 2018 release confirms the long-term picture that the richest and most powerful countries have continued to pose the greatest global risks – with Switzerland and the US established as the key facilitators of illicit financial flows,” he said.
“If we are to end tax evasion, corruption, fraud and money laundering, the world’s major financial centres need to clean up their act. And since they are not willing to do that voluntarily, the UN should create a global convention to end financial secrecy once and for all.”
According to the survey published every two or three years, the largest contributors to global financial secrecy are Switzerland, the US and the Cayman Islands.
The top 10 secrecy jurisdictions do not feature the UK. But UK was still protecting its overseas territories which is frustrating moves towards transparency and reforms, the TJN warned. The foreign territories of the UK are primarily former colonies and some of them have become prominent tax havens.
The introduction of a register of beneficial ownership for domestic companies is one step that has been taken by the UK towards transparency at home and this was acknowledged by the TJN. But after the 2017 general elections, there has bene a stalling of the efforts of the UK government at bring in reforms in its overseas territories, TJN said.
“In recent years the government of the UK refused to impose more financial transparency on these territories, especially with regard to trusts,” the group said.
“To the contrary, it has actively protected them from international scrutiny, for example, by lobbying to remove them from the EU’s list of tax havens released in 2017.”
A spokesperson for HM Treasury said: “Overseas territories are separate jurisdictions with their own democratically elected governments and they decide their own fiscal matters.
“Thanks to our leadership, all of our crown dependencies and overseas territories with financial centres are committed to all global tax transparency standards, including the Common Reporting Standard that makes it harder for companies and individuals to hide their money abroad.”
“There is now real concern about the damage this promotion of illicit financial flows is doing to the global economy,” the TJN said.
(Adapted from TheGuardian.com)