Liechtenstein: The OECD is on message

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The OECD has issued a welcome press release concerning the developing problem concerning tax evasion in Liechtenstein. It says:

Disclosures concerning alleged widespread tax evasion by German citizens through Liechtenstein highlight a much broader challenge in today’s globalised economy: how to respond to countries and territories that seek to profit from tax dodging by residents of other jurisdictions.

I am immensely encouraged by the strength of this language and that the word dodging has also been used to cover both evasion and avoidance.

In the face of attacks from the Bush administration pre 9/11 the OECD was forced to back down from its attack on tax havens. The return of this welcome and bullish language is great news.

The reality is that the problem is now being proven to exist.

Civil society, led by the Tax Justice Network is demanding change and an end to this abuse.

And the OECD is using the sort of language that we use: it is saying that what is happening here is deliberate abuse, promoted by states and run from their domain by parasitical banks, lawyers and accountants with the objective of profiting from illegal and abusive behaviour by the residents of other countries.

The ethical point I made yesterday is implicit in this comment: the reality of tax haven activity is that it is deliberate action by one government to undermine the regulation of another. That is why concerted action to end it is required.