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Economist Gabriel Zucman, a specialist in fiscal fraud, has calculated that around 5.8 trillion euros ($7.4 trillion) is stashed away in tax havens, depriving authorities all over the world of around 130 billion euros in revenue each year.
Over the past two years, under voluntary disclosure programmes, more than half a million taxpayers have voluntarily declared more than $37 billion in income and wealth hidden from their tax authorities, the OECD estimated. Another sign of progress is the willingness by Switzerland, formerly seen as the vanguard of banking secrecy, to get involved.
BERLIN: More than 80 countries signed an agreement in Berlin on Wednesday (Oct 29) that could end banking secrecy in the global battle against tax evasion and fraud, even though critics pointed to shortcomings in the deal. Among the signatories were EU countries but also previously staunch proponents of banking secrecy such as Liechtenstein and tax havens like the Cayman or Virgin Islands.
Countries will also be able to decide on a case-by-case basis which information will be automatically exchanged. Switzerland, for example, has said it will hand over information only to countries which are important for Swiss industry. Thus, the holdings of wealthy citizens from poor countries will not come under scrutiny. Tax evaders could also hide behind "smoke-screen" companies or foundations in certain cases where banks are not obliged to reveal the identity of the account holder. That will not help the fight against international money-laundering, the critics complain.
Finance ministers from over 51 countries signed an agreement in a step closer to ending the dark financial underworld of tax-evasion and money-laundering. Another 30 countries pledged to join by 2018.
Asset hideouts like Austria, Switzerland, and the Bahamas didn’t sign the agreement itself, but promised to join the initiative by 2018.