Wednesday, May 12, 2010

Jersey signals storm warning over incoming UK government

Today's edition of the Jersey Evening Post carries an article highlighting local concerns that the newly agreed coalition government will include strong critics of tax havens.

It has been announced that Britain's first coalition government since 1945 will include economist Vince Cable as Business Secretary with responsibility for banking and business affairs.

Mr Cable, author of The Storm, is considered a hawk on tax avoidance and tax havens. He has made strong comments in the recent past about the need to crack down on avoidance:

The evidence of systematic tax avoidance by rich individuals and UK-based companies strikes a particularly ugly note in these straitened times . . . My own party wants to tackle more systematically the anomalies that make it possible to avoid paying even the top 40% rate, let alone 45% or more.

And his views on tax havens are equally robust:

To really end the secrecy tax havens offer, there must be effective information sharing between havens and all countries where their account holders are resident or are citizens. A truly global deal where this information is shared automatically would help countries rich and poor alike.

New accounting standards are also needed to force multinational companies to declare publicly the profits they make, and the taxes they pay, in every country in which they operate. That way anomalies would be quickly spotted.

So there you have it. The newly appointed Government minister for banking and business affairs has publicly supported automatic tax information exchange between OECD and non-OECD countries, and TJN's long-standing demand for an international accounting standard on country-by-country reporting. No wonder tax havens like Jersey have the jitters.

Having talked the talked while in opposition, let's hope that Vince Cable now walks the walk, despite being tied to a Conservative Party that is widely regarded as the tax avoider's friend.

Is this a potential faultline in the Britain's new coalition government?


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