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Saturday , November 17 2018

‘Inter-governmental accords disclosing financial data vital’

KUWAIT CITY, April 13: In this week’s Arab Times online poll, readers shared their opinions on what steps should be taken to crack down on global tax evasion and money laundering with the majority of respondents stating that countries should push for multilateral agreements on reporting financial data for greater transparency.

The recent data leak of more than 11.5 million financial and legal records has exposed secretive offshore companies and spurred global investigations. 35 percent of voters welcomed intergovernmental agreements disclosing financial accounts and assets as the surest way to uncover abusive taxavoidance schemes involving offshore activity. “The only way to combat tax evasion is to place the burden of financial reporting on financial institutions and governments”, a reader shared. “I think greater exchange of information, mandated by agreements, reduces the possibility for tax evasion and money laundering. This way, governments will be able to not only recover tax revenue lost to non-compliant taxpayers but also increase transparency, cooperation, and accountability among financial institutions and tax administrations. It won’t be easy for firms to set up complex corporate structures to hide their clients money.”

22 percent felt that simplifying corporate taxes and implementing a zero tax scheme on foreign income earned would solve the matter while another 22 percent of voters were of the view that blacklisting and implement strict sanctions on tax haven countries who promote such business would be most effectual. “One of the negative effects of globalisation is that it has provided the rich and powerful with opportunities to hide wealth. Individual governments must reduce the tax burden to counter harmful behaviour”, a voter shared.

15 percent felt that harsher penalties for offenders would be vital in dissuading others. “The only way to increase compliance is for those who evade and avoid paying their taxes should be punished and not be allowed to get away it, this is the only deterrent”, a reader told the Arab Times. “I think penalising offenders is not just necessary to set an example for others but also to restore people’s faith in the rule of law and the democratic process”, another respondent shared.

Only 6 percent felt that offshore accounts were necessary. “Not all offshore activities are illegal. There are many valid reasons to get a offshore account. For example, if you don’t trust your country’s banking system why would you put all your money there? It is better to put your eggs in different baskets. As long as you pay whatever is due, and disclose all your finances and assets, I see no problem with having offshore investments.”

By Cinatra Fernandes Arab Times Staff

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