Panama holds out against campaign to end era of banking secrecy
(business.timesonline.co.uk) Faced with the growing hostility of politicians, some tax havens quickly crumbled under the pressure.
But while countries such as Switzerland have bowed to demands to end the era of “no questions asked-banking”, Panama is digging in its heels and touting for business as one of the few places where money can still be safely stowed away.
Leading tax advisers report that lawyers from the republic — which has so far failed to make good on promises of greater transparency — have been e-mailing them to highlight its credentials as one of the last remaining tax havens.
The Group of 20 industrialised and developing nations agreed this month to end “an era of banking secrecy” by unearthing billions of pounds thought to be hidden from tax authorities in offshore banks.
Panama was among the countries singled out as an offender — despite the fact that it committed itself to the Organisation for Economic Co-operation and Development (OECD) in 2002 to improve the transparency of its system and to establish an effective exchange of information. But such e-mails would seem to undermine Gordon Brown's declaration that it is “the beginning of the end of tax havens.”
Mike Warburton, senior tax partner at Grant Thornton, said that they would prompt concern that individuals intent on evading tax might simply move their money.
“People intent on illegally evading their taxes will move their money to places prepared to take it,” he said.
The OECD identified Panama as meeting the technical criteria for being a tax haven in June 2000.
The country came under the spotlight last year as the location chosen by John Darwin, the canoeist who faked his own death, to salt away assets totalling £500,000 including an apartment in Panama City and an expanse of rainforest in Escobal that he hoped to turn into an eco-tourism resort.
At the G20 summit politicians threatened to take action against “non-co-operative jurisdictions”.
The OECD has been asked to investigate and report back by November when finance ministers meet in Scotland.
Pressure on tax havens
- About $11.5 trillion is held in havens, according to the Tax Justice Network
- The OECD says its crackdown is bearing fruit. Ireland recently took $1 billion that would otherwise have escaped the taxman's net
- Seven UK overseas territories including Anguilla, Bermuda and the British Virgin Islands stay on an OECD “grey list” for falling short on information-sharing agreements
