No more secret piggy bank?
Gordon Brown last night hailed the beginning of the end for tax havens, as Switzerland opened up its legendary system of bank secrecy and agreed to hand over information on wealthy clients suspected of tax evasion.In a remarkable week, Europe’s secrecy jurisdictions – Liechtenstein, Andorra, Austria, Luxembourg, Jersey and Switzerland – all entered into international information sharing agreements.
Swiss ministers said the government caved in after learning the country was going to be included this month on a blacklist of uncooperative tax havens drawn up by the Organisation for Economic Co-operation and Development (OECD). Having agreed to sign up to the OECD protocol on tax, Switzerland will hand over information on account holders suspected of tax evasion by another country.
Until now tax evasion was not illegal in Switzerland and secrecy has been the bedrock of its economy.
Hans-Rudolf Merz, Swiss president and finance minister, said yesterday: “Co-operation on taxes has become more important given the globalisation of financial markets and in particular against the background of the financial crisis.”
Switzerland is the world’s biggest tax haven. The world’s rich hide at least $1.89 tn (£1.35tn) of the estimated $7trn of private wealth there according to the Swiss Bankers Association, though others put the figure much higher.
It’s a start.