Describing it as striking a “hammer blow” against those which hide illegal tax evasion in the “dark corners” of the financial system, it comes on the back of the so-called “Panama Papers”. These documents revealed how some of the world’s most prominent leaders have used tax havens to hide their wealth.
The automatic sharing of information will reportedly make it more difficult for companies to dodge tax or funnel corrupt funds. Tax and law enforcement agencies will now be in greater communication, exchanging data on company beneficial ownership registers and new registers of trusts.
Osborne said: “Britain will work with our major European partners to find out who really owns the secretive shell companies and trusts that have been used as conduits for evading tax, laundering money and benefitting from corruption.
“It was Britain that led the world in pushing for the automatic exchange of personal tax data and encouraged the OECD to develop new rules for taxing multinationals more fairly. Since the dozens of other countries have followed our example.”
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The chancellor, who himself published personal tax details in a move designed to curb public outcry, believes the new European partners will be “setting the pace” on transparency. Of the opinion that no single country can tackle international tax evasion individually, he expects the rest of the world to follow suit in time.
Osborne also penned a letter to fellow G20 members to encourage greater data exchange and lift the “veil of secrecy” under which criminals operate.
According to the government, in this parliament term it will legislate for over 25 measures to ensure people do not get out of tax payments. This will, it also stated, raise £16n by 2021.
One of the government’s most prominent initiatives is the general anti-avoidance rule (GAAR), which augmented existing provisions and any targets anti-avoidance rules in order to allow UK tax authorities to counter perceived abusive arrangements by invoking the GAAR rather than seeking resolution through the courts.
In November 2015, it was announced that a penalty of up to 60 per cent of tax due will be added to GAAR’s arsenal.
The Panama Papers may just fuel great global change and spur joint efforts to combat tax evasion.
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