In past a number of Pakistani politicians have had special relations with Swiss banks. It seems situation is getting tighter but does it make a difference?
Due to its domestic withholding tax system coupled with an information exchange with foreign authorities mostly limited to tax fraud cases, Swiss banks have enjoyed large inflows of foreign deposits over the years. The adoption of Organization for Economic Co-operation and Development (OECD) standards for tax co-operation as well as the ongoing lawsuit between the U.S. Internal Revenue Service (IRS) and the Swiss bank UBS led to a dilution of Swiss bank secrecy. The result has been a massive outflow of funds as worried investors are looking for a new safe-haven. With bank secrecy being a cornerstone of Swiss banking, this development raises concerns about the outlook for the banking industry.
Yup. That’s right. If you can’t hide it in Swiss accounts anymore that means politicians are gonna be looking at some other venues!
On September 1, 2009, Austria became the last member of the European Union to relax its laws on bank secrecy in order to comply with the criteria posed by the Organization for Economic Co-operation and Development (OECD) in an effort to shed Austria’s tax haven label. The outcome of the vote was in line with the four-party agreement that had been reached on August 26, 2009 between the two coalition parties and two major opposition factions to water-down the existing laws on bank secrecy. The deal was only made possible due to substantial political concessions from the coalition parties’ side towards the opposition. RGE
Over the past month, leaders have made similar promises in Singapore, Liechtenstein, Bermuda, the British islands of Jersey and Guernsey, and tiny Andorra… other ‘offshore’ banking centers are still available in the Caribbean, Panama, Dubai and elsewhere. Slashdot
It seems its not just Swiss but others are feeling the heat as well.
Since its a matter of big sums and deals, it means that demand for other methods of hiding the stash away could be higher than before. Its not just Zardari but there are others as well and how some did it, the Indians, the 52000 Americans.
Switzerland is one of the possibly 77 tax havens in the world where rich individuals (from all over the world) keep their money from the prying eyes of their governments. IntelliBriefs.
Now that’s a lot of tax havens. Its like a tax haven for every 2.5 countries. And it may not be very easy to track all of the culprits down. So will we be able to find out about actual assets of politicians in near future. Probably not. And in long run everyone forgets. Especially in Pakistan people do not remember anything. If they did, they wouldn’t vote for the same candidates time and again.
1) Above still has a paper trail. Transaction where no paper is involved are even harder to trace.
2) Are these pressures on tax havens because governments don’t have money due to financial crises and they are trying to get money from any possible mean?