Friday, August 20, 2010

French anti-tax evasion blitz yields €700 million

A few days ago we blogged an article by a prominent French politician rejecting proposals for a tax amnesty. Now comes news that French anti-evasion tactics are making life a great deal less comfortable for tax evaders. As this interview with the OECD's Pascal Saint-Amans reveals (sorry, its only available in French), recent anti-evasion efforts have yielded over €700 million in just a few months, sending strong signals to French evaders that this national sport has become a great deal less fun.

Similar tactics are being used in Italy, where the Guardia di Finanza has launched investigations into over 2,000 wealthy Italians who are suspected over owing around €2 billion of evaded taxes between them. This summer tax inspectors have been knocking on the doors of villas up and down the coastlines in an effort to make life just a little less comfortable for wealthy people who have become adept at the art of exploiting Italy's regular tax amnesties, which serve little purpose other than to feed the average Italian's cynicism about the tax regime.

Elsewhere in the interview Pascal claims success in the OECD's programme to strengthen tax information exchange processes, but such claims must be treated with scepticism. Despite the flurry of activity last year when secrecy jurisdictions rushed to sign tax information exchange agreements to achieve the OECD's ludicrously low threshold, there is no evidence that these pieces of paper have increased judicial cooperation, and according to Jersey's Colin Powell, secrecy jurisdictions will not be revealing data about volumes of information exchange. In the absence of such data, it will be very hard for the OECD to demonstrate that substantial progress has been made.

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