Panama Is Not The Only Secret Tax Haven, Says OECD

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Panama is not the only secret tax haven for the wealthy to shelter their riches behind a veil of secrecy.

The country has backtracked on agreements to automatically exchange tax information with more than 100 other nations and is dragging out compliance, says Organisation of Economic Co-Operation and Development (OECD) Secretary-General Angel Gurria

The OECD is a group of leading industrial nations developing a global tax reporting network aimed at wiping out tax evasion by imposing a common reporting standard on hundreds of thousands of financial institutions starting in 2017.

In a statement in response to global headlines about revelations of tax avoidance and cheating in the Panama Papers, Gurria has revealed other countries are also helping drug dealers, corrupt world leaders and terrorists move and maunder cash.

Financial secrecy aids tax evasion

“The papers describe in detail how secrecy is allowing the transfer of funds between different offshore jurisdictions where it is hidden from tax authorities,” he said.

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“Panama and a few other states have been reluctant to move forward at the same pace as the rest of the international community.”

“Panama’s consistent failure to comply with international standards monitored by the OECD is facilitating the use of offshore financial centres for hiding funds, depriving governments of tax revenue and often aiding and abetting criminal behaviour.”

He also explained that Panama has held back from updating legislation to improve tax transparency for many years but finally bowed to pressure in 2015.

Gurria says that after more than 200 reviews of the tax compliance policies of countries around the world, he can say Panama is not the only where financial secrecy is helping suspected tax evasion.

OECD leader names tax black spots

“The OECD has identified a number of places where the legal and regulatory framework for the exchange of tax and financial information do not meet international standards,” he said.

“Panama’s standards remain far behind those of comparable international financial centres.

“They include Guatemala, Kazakhstan, Lebanon, Liberia, Micronesia, Nauru, Trinidad and Tobago and Vanuatu. It is clear that there are other places where a lack of information on beneficial ownership of corporate and other entities is facilitating illicit flows.”

Panama President Juan Carlos Varela has pledged to commission a panel of expert to look at the country’s tax transparency issues, although he did not suggest when the panel would be appointed or a timescale for reporting.

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