Countries Unite to End Banking Secrecy

More than 80 countries have signed up to a deal that aims to end banking secrecy, in what its sponsors hope will be a major step in a global campaign against tax evasion and fraud.

Fifty-one countries are joining the Multilateral Competent Authority Agreement, under which their national tax authorities will exchange information automatically from September 2017, with 30 more countries pledging to sign up a year later in 2018. The aim is for every country to be kept fully informed about the offshore holdings of its citizens.

Among the first round of signatories or ‘early adopters’ were European Union (EU) countries and also previously staunch proponents of banking secrecy such as Liechtenstein and tax havens like the Cayman or Virgin Islands.

Among the countries scheduled to follow in 2018 are Austria, Switzerland, the Bahamas and the United Arab Emirates (UAE)

Signing of the deal in Berlin followed two days of talks by multilateral framework the Global Forum on Transparency and Exchange of Information for Tax Purposes, hosted by Germany’s finance minister Wolfgang Schaeuble. The forum was established by the Organisation of Economic Cooperation and Development (OECD) and the G20 group of major world economies.

At a news conference, UK chancellor of the exchequer, George Osborne, described tax evasion as a “scourge across the world” and said that signing of the deal was a ‘key moment’ in worldwide efforts to stamp it out. The deal would “reduce the places that tax evaders can hide their money” although the forum’s work was not yet finished.

French minister Michel Sapin said it was ‘intolerable’ that taxpayers should have to feel that some people were somehow exempt and could dodge taxes.

Economist Gabriel Zucman, a specialist in fiscal fraud, has calculated that about €5.8 trillion (US$7.4 trillion) is stashed away in tax havens, depriving authorities worldwide of revenues totalling around €130bn annually.

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