In 2005 I wrote this with John Christensen:
Automatic information exchange between countries would go a long way towards tackling the culture of tax evasion and tax avoidance. The European Union has made some progress with the European Savings Tax Directive, but this is restricted in scope and needs to be extended to cover all countries. It is therefore proposed that:
- All banks and other financial institutions should be required to disclose as a matter of legal duty all interest, dividends, royalties, licencefees and other income (including that from employment) that they pay to citizens of another country each year, with sufficient information being provided to ensure that the recipient can be identified.
- This information should be automatically exchanged between countries so that each country has access to data on the income paid to its citizens in other countries to ensure that it is properly taxed.
We were at the time the only people anywhere in civil society in the world making such a call, as far as I know. And we were treated as if such a thing would never happen, Indeed, I was told it would not during my lifetime by officials in the UK Treasury in June 2009.
Automatic information exchange began in 2016.
Today we learn from the FT that:
HMRC's specialist investigation department, the offshore, corporate and wealthy unit, has opened 839 investigations into UK taxpayers, with assets in offshore tax havens over the past year.
The unit was founded around the time of the Panama Papers leak, which was a watershed moment in the crackdown on offshore tax evasion.
HMRC also has vast amounts of data at its disposal since it started receiving information in 2016 on individuals' bank accounts from offshore financial centres such as the Channel Islands, Bermuda and the British Virgin Islands.
The Panama Papers might have provided political cover; it was automatic information exchange that made it possible.
I do not of course claim all credit for that for campaigners. Far from it, of course. But do I claim some for what we did? Yes, of course I do. Change needs catalysts and as we also noted in 2005:
[T]here currently [no] global initiatives under way to abolish banking secrecy in tax matters, whether de jure or de facto in the case of offshore companies and trusts, or to implement a global framework for automatic information exchange of relevant tax information.
We set out to create the political will to do that. It happened.
I make the point for a good reason; change is possible. there are days when we need to be reminded of that.
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I’m really pleased to hear this.
But I do hope that it is not just window dressing. This Government is superb at making gestures that go on to be proven to be too short of what actually needs to be done. All that matters to them is to be seen to be doing something.
Being seen is important here
That creates a deterrent effect
Hence why I talk about such things
Fair enough.
In 2016*, I wrote….
Think you meant say: In 2005, I wrote…
No need to publish this!
Thanks!
Richard, automatic exchange of information was born in 2009 when FATCA was presented to Congress. I don’t think you can realistically take credit for that.
First, you are wrong. Automatic information exchange was created by the European Union Savings Tax Directive in 2003.
Second, of course automatic information exchange comes from legislation. But do you have no clue that legislation happens because of a political sentiment? And that we may have helped create that sentiment? Or do you think it magics out of thin air?
Thanks for the positivity Richard, and the work you’ve done to bring this about.
Btw, I spoke with with John Christensen a couple of weeks back about the different, less optimistic message he sometimes has on these matters. To be honest I was thinking maybe you exagerate sometimes. But he was very clear that your take on these things is valid, and also said that in several respects you’re the individual most responsible for driving progress on these crucial global issues.
If the world ever finally gets the well funded public services needed so that even the less able get the chance to flourish, then history should record yourself as one of the key people who made the needed global wealth tax &/or people’s Q.E. possible.
An even more impressive feat, as having met you a few times, you seem to lack several of the qualities normally needed by a successful political actor. God bless you.
Thank you
John seriously undersells himself
My relationship with him has been, we mutually agree, the most constructive either of us has ever enjoyed
Your blog previously said that in 2016 you invented FATCA, enacted in 2009.
You have now edited the blog, and are claiming that in 2005 you invented the Savings Directive, enacted in 2003.
Isn’t this a bit silly?
I changed the 2016 data – it was a mistake – I linked a 2005 document
I have never said we created automatic information exchange
I said to you that was the European Union Savings Tax Directive
It is you being very, very silly
I suggest you stop playing games. They really are very unappealing
BRavo Richard…
The reward for a job well done is another job to do.
In this case, noisy headlines and one ‘headline’ prosecution; and a quiet retreat from pursuing the bulk of the money.
The Swiss tax ‘scandal’, two or three years ago, is the model. That, and the Liechtenstein exemption.
So: the next job is vigilance, and some pre-written campaign material in a press-pack, ready to go.