British PM suggests ban on tax havens

5th March 2009, Comments 1 comment

The issue of tax havens, which often allow the world's wealthiest to hide money from governments and tax authorities, is due to figure on the agenda for the London summit on April 2.

Washington -- British Prime Minister Gordon Brown took aim at tax havens suggesting they should be outlawed just a few weeks before he hosts the G20 summit in London.

"You are also restructuring your banks, so are we," Brown said in a landmark address to the US Congress Wednesday highlighting moves to tackle the financial crisis.

"But how much safer would everybody's savings be if the whole world finally came together to outlaw shadow banking systems and outlaw offshore tax havens?"

The issue of tax havens, which often allow the world's wealthiest to hide money from governments and tax authorities, is due to figure on the agenda for the London summit on April 2.

It will be the first international meeting to be attended by new US President Barack Obama overseas since he took office on January 20.

"So that the whole of our worldwide banking system serves our prosperity rather than risks it, let us agree in our G20 summit in London in April rules and standards for proper accountability, transparency, and reward that will mean an end to the excesses and will apply to every bank, everywhere, all the time," Brown urged.

London has gradually warmed to the idea of regulating the banking system, after having been criticized for the practices of its offshore tax havens in the Isle of Man, and the Channel Islands.

Last month, British finance minister Alistair Darling denounced the secrecy of Swiss banks in an interview with the Observer newspaper, saying lack of transparency was a major contributing factor to global credit crunch.

"I think it's important there is transparency. People don't know what's going on. That's not good. Indeed, half the problems we have got now is because people didn't know what was going on," Darling told the newspaper.

"The secrecy that allows people to shelter their wealth from tax that's properly paid -- you can't tolerate that."

In Berlin on February 22, the leaders of Britain, France, Germany, Italy, Spain and the Netherlands agreed that "all financial markets, products and participants -- including hedge funds and other private pools of capital which may pose a systemic risk -- must be subjected to appropriate oversight or regulation."

And French President Nicolas Sarkozy on Sunday suggested Switzerland could be put on a planned G20 blacklist of tax havens, igniting anger from Swiss authorities.

In recent months, Switzerland has faced international pressure especially in the United States and in the European Union, where critics claimed secrecy encourages their citizens to evade taxes by hiding their money in Swiss banks.

Obama said shortly after his election that he saw the world's 40 tax havens as a problem to be addressed.


1 Comment To This Article

  • Dennis posted:

    on 5th March 2009, 15:36:27 - Reply

    Yeah, brilliant. Lets tax those people that generate work and jobs even more, lets have the government (that notoriously efficient organization) distribute the funds in their normally excellent fashion. Yeah...lets do that.

    I think we have a confluence of horrible circumstances....we see the failure of unfettered free market enterprise bumping into the absence of leadership and accountability in national governments. I can hardly wait to see what happens....I am sure our children will thank us for regulating and taxing the job creation engines into oblivion.

    Maybe the hermits have it right....