Treasurer Costello Endorses Bermuda Angle On Tax Havens
The Age
Wednesday November 16, 2005
TREASURER Peter Costello has issued a sharply worded warning to Western governments and tax havens alike against pursuing a "race to the bottom" by trying to attract business from tax avoiders.
Opening a two-day Organisation for Economic Co-operation and Development forum in Melbourne on tax havens, Mr Costello revealed that Australian tax officials had broken new ground by negotiating their first information-sharing agreement with a tax haven, Bermuda.The deal, intended to be the first of many with tax havens around the world, means tax officials from Australia and Bermuda will exchange full information on criminal and civil tax matters, ending the shroud of secrecy that tax havens have traditionally offered to tax evaders.But while congratulating Bermuda, Mr Costello warned other tax havens and OECD countries they needed to move faster to lift their shrouds, pointing out that they were being used to shelter criminals and terrorists."Our revenue authorities have recently uncovered extensive information suggesting international promoters are marketing cross-border tax schemes, allegedly of a criminal nature."While closer integration was in the interests of all countries, Mr Costello said, the rules for integration needed to be defined and they needed to be clear and transparent. "Rules and standards are necessary to prevent abuses of the international financial system, be it through financing criminal and terrorist activities, or allowing taxpayers to avoid their obligations," he said."There are no long-term benefits from a race to the bottom, with countries competing to attract financial activity on the basis of reduced transparency and a willingness to turn a blind eye to tax abuses. Highly mobile capital will shift the moment a better option is presented."
© 2005 The Age