Swiss seen as lagging in global hunt for tax cheats

G20 Finance Ministers and Bank Governors at the 2013 IMF and World Bank Spring Meetings in Washington Keystone

In response to Switzerland’s being placed on a “could do better” list, Swiss Finance Minister Eveline Widmer-Schlumpf has said the country is ready to take part in discussions “under the condition that it is not just a European standard but a global” one.

“Switzerland for the time being is stuck,” said Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy.

The Paris-based organisation, which comprises 34 industrialised nations, presented its report to the Group of 20 finance ministers and central bank governors meeting in connection with the International Monetary Fund and World Bank semi-annual conference in Washington.
 
The standards – which call for automatic data exchange between countries when tax cheating is suspected – reflect a tougher approach to tax avoidance agreed upon in 2009 by the world’s financial centres.
 
“Significant progress has been made … but significant progress remains to be made,” said Saint-Amans. He acknowledged that Switzerland had made progress, but was not done yet with changing its ways.

  

Widmer-Schlumpf represented Switzerland at the meeting of the G20 at the invitation of Russia, this year’s G20 chair.

Swiss self-defence

She presented a progress report from the Global Forum on Transparency and Information Exchange for Tax Purposes, showing that Switzerland has undertaken to comply with the standards and is currently putting them into practice.
 
The report was to “show that the cabinet has introduced solutions for all of the issues criticised by the Global Forum”, according to a press statement on Thursday.
 
Switzerland has been under fire for several years for the sheltering of taxable income by its banking sector. UBS, Switzerland’s largest bank, paid $780 million (CHF730 million) in 2009 and handed over thousands of client names to settle US charges that it helped US citizens hide funds.

On Friday, Widmer-Schlumpf said Switzerland wanted to find a solution to the tax dispute with the UN “as soon as possible”, adding that a concrete proposal was currently being discussed. However, she couldn’t say when a result could be expected.

She said she had met her US counterpart Jack Lew in Washington, but he had said the ultimate decision on the discussed proposal would be taken by the justice department.

Reuters news agency quoted one person familiar with the issue as saying that, under the proposal, 300 Swiss banks could expect various consequences for having helped rich Americans dodge the taxman.

Combatting banking secrecy

On Friday in Washington, the finance ministers of the G20 countries urged the international community to do away with banking secrecy, noting that the global economy has avoided “major risks”, but remains unequal.

Tax evasion has dominated European headlines in recent weeks, following the admission by a disgraced former French minister that he held a Swiss account, and the recent leak of data about thousands of holders of secret bank accounts worldwide.