Romil Patel
The EU's top five economies have agreed to share information
on secret business owners and trusts in an effort to stamp out tax
dodging. Chancellor George Osborne hailed the deal as a "hammer blow"
against tax evaders.
The agreement between the UK, France, Germany, Italy and
Spain is in response to the Panama Papers leak which revealed how the
rich and powerful stash their wealth from the taxman by using complex
networks of companies operating in a highly secretive manner. Treasury
officials said the deal would make it more difficult for companies and
rich individuals to continue operating without paying the appropriate
tax, according to the BBC.
"Today we deal another hammer blow against those who hide
their illegal tax evasion in the dark corners of the financial system,"
the chancellor said at the IMF's spring meeting in Washington DC.
"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 benefiting
from corruption," he added.
The fallout from the Panama Papers prompted senior politicians, including Prime Minister David Cameron, Labour leader Jeremy Corbyn and Osborne to publish details of their financial affairs.
Corbyn said the government should contemplate imposing direct rule on
British overseas territories and crown dependencies from the UK in a bid
to crackdown on tax havens.
Osborne also called on other G20 members to follow suit. "It
is Britain and our European partners setting the pace on beneficial
ownership transparency of not just companies but also trusts with tax
consequences – and I expect that the rest of the world will move to
follow our example," he said.
"It shows the benefit of working together. No single country
can tackle international tax evasion alone – and Britain should never
fool itself into thinking that it can do this by itself," the chancellor
added.
In a letter addressed to fellow G20 nations, the five EU
countries said: "In our view, this new initiative will take a
significant step forward in improving the transparency of beneficial
ownership information and in removing the veil of secrecy under which criminals operate.
"The recent extensive leaks from Panama show the critical
importance of the fight against tax evasion, aggressive tax planning and
money laundering ... Criminals continue to find ways to exploit the
cracks in the current system, setting up complex structures in various
and often multiple locations to hide their activities ... As with tax
evasion, this requires a global response."
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