Links Jun 13

India asks tax havens to share past banking information The Economic Times
Jun 13 - Finance Minister Pranab Mukherjee, at a seminar jointly organised by the finance ministry and the OECD, said: "There is an urgent need to revisit the existing legal framework developed by OECD". Mukherjee also observed that 'tax havens and low tax jurisdictions were among major reasons behind the recent global financial crisis.'

Illegally acquired African assets embarrass France Le Monde (In French)
June 8 - Threats linked to a judicial investigation in France on illegally acquired assets have not tempered the taste for luxury indulged by the three African presidents involved in the complaint, filed in Paris in 2008 by Transparency International. They continue to act as though invincible, amassing luxury goods and exceptional cars.

Tax Havens - Germany is their friend Alternatives Economiques (In French)
Jun 2 - On how Germany is sabotaging international and European efforts in the fight against tax havens, through negotiations with Switzerland on the imposition of a withholding tax that threatens to undermine moves towards automatic information exchange. See our earlier blog Germany is building a gateway for criminal money

Europe: Hidden economy Financial Times (subscription only)
Jun 8 - 'The western world’s economic and financial crisis of the past three years ... has aroused new concerns about underground economic activity. “Black” workers pay no taxes, reducing government income and increasing budget deficits, which can prompt higher taxes to make up for lost revenue, which in turn tempts more people into the black economy – a vicious circle of rising crime and decreasing government legitimacy.'

The roots of the Greek tragedy: bloated bureaucracy and tax evasion The Globe and Mail
Jun 10 - 'The sight of a helicopter can cause panic in the plush suburbs of northern Athens. Residents know it could be a spy machine, hired by the government to take images of their backyard swimming pools. Tax collectors make doctors and lawyers squirm by asking how someone who claims to be earning only $20,000 a year can afford such luxuries.'

State publishes list of tax dodgers ABC News
Jun 8 - The California Franchise Tax Board has put out its list of top tax dodgers. Among those listed include a Hollywood celebrity, a dot-com millionaire, and more than 200 others who owe a combined $180 million to the state.

Tel Le Sueur, Tel Le Sueur, riding through the glen... Tax Research UK
Jun 12 - 'Robin Hood (in reverse) strikes Jersey again. A fortnight after the Jersey government put GST (the Jersey form of VAT) up to 5%, hitting the poorest, the Jersey Council of Ministers have decided not to increase social security charges for those earning more than £44232 per annum ...This in the same week that the rate of taxation on the very wealthy ... has been reduced to – get this – 1%.'

See also:
Tax move to entice the super-rich Jersey Evening Post
Jun 11 - Super-rich immigrants could pay just 1% tax on all income after a minimum £125,000 bill was proposed under new plans to entice them to live in Jersey.

Banks battle over US tax law Financial Times (subscription only)
Jun 12 - On The Foreign Account Tax Compliance Act (FATCA): 'Banks and foreign governments are mounting an increasingly desperate push against a sweeping US tax law that will force overseas institutions to report their American clients to the Internal Revenue Service ... Last week, senior bank executives implored Tim Geithner, US Treasury secretary, to modify the law.' For an explanation of FATCA see here.

See also Richard Murphy's commentary in:
The US gets tough on tax evasion, unlike the UK Tax Research UK
Jun 13 - 'And why are these banks doing this? Because they say it will cost too much to stop tax evasion. Which of course is not true: what these banks are actually saying is that they don’t want to bear the costs of their supplying their clients with the facilities to tax evade: they’d rather society bore that cost instead.'

Report: City of London like a medieval Italian city-state Treasure Islands
Jun 13 - Nick Shaxson comments on 'The respected UK-based Centre for Research on Socio-Cultural Change (CRESC) has published a new and meticulously researched report entitled City State against national settlement: UK economic policy and politics after the financial crisis.'

See also:
Can the coalition revive regional Britain while the City still rules the economy? The Guardian
Jun 13 - Manufacturing has declined across the UK, while the government has failed to challenge the power of the London-centric financial services sector.