Tax Commissioners battle against tax evasion

Tax administrations in Australia, Canada, France, Italy, New Zealand, Sweden, United Kingdom, the United States of America, and others - all member countries of the OECD's Forum on Tax Administration (FTA) - are working together following revelations that Liechtenstein bank accounts are being used for tax avoidance and evasion.

HMRC has opened enquiries into UK residents who have Liechtenstein accounts to establish whether the accounts have been disclosed for tax as UK law requires. Many have not been disclosed.

HMRC Acting Chairman Dave Hartnett said: “Tax evasion is not a victimless crime. Honest citizens have to meet the cost of the tax that is evaded by a minority who are dishonest. Tax cheats deprive our public services of vital funding.

Everyone is entitled to conduct their financial affairs in privacy but secrecy laws which facilitate tax evasion are completely unacceptable. Those who have hidden their income and gains from HMRC should come forward and make a prompt and complete disclosure.

In the light of recent developments involving Liechtenstein bank accounts, there needs to be a significant move towards full implementation of OECD standards on transparency and effective exchange of information in tax matters.”

All the countries now working together were represented at the FTA's September 2006 meeting in Seoul, Korea when Tax Commissioners from more than 30 countries identified the use of tax haven bank accounts as a major threat to successful tax administration.

The Commissioners will continue to re-examine the effectiveness of the measures in place to protect tax bases and to consider whether new measures might be needed. At the FTA 2008 meeting in South Africa, the Commissioners agreed to study the role of banks in tax compliance.