Mon, Jun 17, 2013 - Page 15 News List

Cameron secures tax havens agreement to clampdown

The Observer, London

British Prime Minister David Cameron yesterday secured agreement from Britain’s overseas territories and Crown dependencies that they will sign up to a new clampdown on tax evasion.

On the eve of the G8 summit, leaders agreed at British government talks to a series of actions aimed at promoting transparency and exchange of information between tax jurisdictions. Developing countries will now be able to request information about companies registered in British tax havens, such as the British Virgin Islands and Bermuda, after a deal was struck during what the prime minister called a “very good” meeting.

Three former British Labour home secretaries, Alan Johnson, Jacqui Smith and David Blunkett, also made public a letter to Cameron offering support for his target of greater financial transparency as a weapon in the fight against terrorism and organized crime.

However, campaigners gave only qualified support to what Cameron agreed on Saturday after he said in an interview with the Guardian newspaper that a new register of beneficial ownership revealing the identity of companies with cash in tax havens would not be open for public scrutiny.

It is feared this will mean that the developing world will only be able to access information from the tax havens if a specific request is made. Such a situation would be of little help to countries which do not know where cash that could be taxed in their countries is ending up.

Melanie Ward, spokeswoman for the Enough For Everyone If campaign (consisting of more than 100 aid organizations and religious groups determine to tackle poverty) said the UK needed to have higher aspirations at the G8 summit in Lough Erne, which starts today.

“David Cameron has cleared a big obstacle to a clampdown on tax dodging, but a G8 agreement that will help the world’s poorest is hanging in the balance,” she said. “The prime minister’s promise to make the global tax system work for the world’s poorest is in jeopardy unless the G8 commit to making public and automatically sharing the information poor countries need.”

The prime minister hailed the agreement as a “very positive step forward” which would strengthen his hand in talks with the other G8 leaders in which he has made improving international tax compliance a key issue.

“It is important we are getting our house in order,” he said. “What the Crown dependencies, places like Jersey and the Isle of Man, and the overseas territories, places like the Cayman Islands, have signed up to is basically the existing and the new standards for exchanging tax information. That is vital.”

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