Argentina wants focus on tax havens at G20 summit

| 21/10/2010

(IBTimes): Tax evasion and tax havens will not be as much a focus during this year’s G20 Seoul Summit next month. Sensing this, Argentina’s economy minister Amado Boudou called on the Group of 20 nations to focus on creating more jobs rather than take measures that are weakening currencies and hurting emerging powers. Boudou told Reuters that officials in the summit should focus on moving forward with previous commitments such as overhauling international financial regulations and eliminating tax havens. Reform of financial regulations, particularly related to tax havens and evasion was a key feature in the summits in Washington, London and Pittsburgh since 2008, where members first adopted an agreement to "name and shame" offenders related to tax evasion.

In 2009, a universal standard was adopted and in a move to ensure transparency, all countries were subjected to a ‘peer review’ that would lead to an appraisal of the economic policy of each country in 2-phase process.

The Organization for Economic Co-Operation and Development (OECD) published a report in September on the first phase where the Cayman Islands, long considered a haven for tax evaders, now appeared on the white list of the OECD. The country has an exchange of information pact with a 12 other countries, according to the standards set by the OECD.

Critics argue that the bar for tax standards was set too low. The OECD requires a country to have tax information exchange agreements with a minimum of 12 countries but there are no qualifications for which of these nations are basic requirements. Several countries like Cayman Islands became ‘tax havens’ to promote more inflow of money into their banks by encouraging zero tax rates, banking secrecy and weak regulation, they claimed.

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