World’s Tax Havens Targeted In Cloak-and-briefcase Offensive

LONDON (Dow Jones) — It’s a cloak-and-briefcase offensive sure to become legend in the annals of tax enforcement.

Agents from Germany’s spy agency buy stolen information from a former insider at Liechtenstein’s biggest private bank. Prosecutors then swoop in on suspected German tax evaders. Tax collectors in Britain and other nations are poised to follow suit.

Tax-dodgers, beware: The world’s leading havens for secret stashes of money face an all-out assault, as governments wary of leaner times grow more eager to snare levies that would otherwise go missing.

“There appears to be a change in the political mood,” said Richard Murphy, a U.K.-based adviser to the Tax Justice Network, a think tank that’s backing efforts to stamp out tax havens.

Fear of an oncoming economic slowdown and the resulting pinch on public purse strings has left tax collectors around the world looking anew at tax evasion, including assets hidden in notoriously hard-to-crack offshore locations, experts say.

The potential haul is considerable. By some estimates, the use of offshore tax havens costs the U.S. Treasury each year as much as $100 billion in tax revenues. German authorities, for their part, say offshore havens contribute to around 30 billion euros ($45.8 billion) worth of tax evasion each year.

Given the secrecy surrounding many accounts, it’s difficult to gauge total offshore holdings, much less determine the level of funds parked in individual tax havens, the experts say.

But officials at the Organization for Economic Cooperation and Development have used their own figures and data from the International Monetary Fund and the Bank for International Settlements to estimate that $5 trillion to $7 trillion in assets are held in offshore havens around the world, though not all are undeclared.

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March 14, 2008 | Filed Under tax haven 

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