OECD nations press for action on tax fraud

Officials at a meeting convened by Germany and France hailed progress made in clamping down on tax havens over recent months.

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June 24, 2009 10:52
1 minute read.

 
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Countries that drag their heels on fighting tax fraud should face sanctions that might include higher taxes and the termination of treaties, a group of some 20 nations said Tuesday. Officials at a meeting convened by Germany and France hailed progress made in clamping down on tax havens over recent months, particularly since the Group of 20 summit in April paved the way for a black list of uncooperative countries. However, they said much remains to be done to ensure countries' compliance with the Organization for Economic Cooperation and Development's information-exchange standards, and called for a new monitoring system to be developed. A communique issued by ministers and officials from countries including Italy, Japan, Britain, the Netherlands, Spain and Mexico - as well as Switzerland, Austria and Luxembourg, which have in the past faced criticism for their record on tax - called for "defensive measures" to encourage quick action. Those measures, which it would be up to individual countries to take, could include increased withholding taxes on payments to uncooperative countries and "termination of treaties with countries and territories which refuse effective exchange of information," it added. The countries said they would also consider coordinated action, which could include asking international financial institutions to look over their investment policy with uncooperative countries. "Retaliatory measures are very important, otherwise there is no credibility," French Budget Minister Eric Woerth told reporters. "They are absolutely necessary." OECD Secretary-General Angel Gurria said all the 84 territories his group monitors have now at least committed to its information-sharing standard, although there is "a lot of work ahead" to implement it fully. Since the G-20 summit, "we've had a lot of signings, and I think we've made more progress in the last three months than we had made in the 10 years before that," he said. German Finance Minister Peer Steinbrueck, whose strong criticism of neighbors such as Switzerland, Austria and Luxembourg over tax evasion has caused tension in the past, offered a "compliment" to those three countries Tuesday, saying they had been "notably cooperative and constructive."

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