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Perspective Special Feature Singapore's future as a financial centre: Part II
Perspective Special Feature Singapore's future as a financial centre: Part II
| Singapore's future as a financial centre: Part II |
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| Tuesday, 02 December 2008 |
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Chee Soon Juan Read Part I here.  Tax havens are not a new phenomenon. They have been around for decades, acting as shelters for wealthy individuals wanting to avoid paying taxes in their home countries. Singapore has gotten in on the business only recently compared to other places. But since the advent of the financial crisis a few months ago where some western banks have been wiped out and others left on life-support, some governments have hardened their stance towards offshore banking secrecy. As they find themselves bleeding cash, many of these governments are turning to other means to shore up their finances, one of them being to stop tax monies flowing to offshore secret jurisdictions. The mood changes In February 2007, a young US Senator co-sponsored a bill with two of his colleagues to stop tax havens from exploiting loopholes in the US tax structure. They rather straightforwardly called the proposed legislation the Stop Tax Haven Abuse Act. The proposed legislation describes how Offshore Secrecy Jurisdictions, or tax havens, undermine the integrity of the US tax system, robbing the Treasury of more than US$100 billion each year. It aims to "shut down a lot of these abuses." These jurisdictions, the bill claims, "make it nearly impossible for U.S. authorities to gain access to needed information." At that time, the young senator said about the legislation: “This is a basic issue of fairness and integrity. We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren’t disadvantaged.”  In November 2008, this senator was elected President of the United States. Now President-elect Barack Obama seems intent to crackdown on international tax havens when he assumes power on 20 January 2009. He is expected to introduce wide-ranging tax-reform laws "within weeks" of taking office that "could end years of financial secrecy that have protected the super-rich and international businesses as they move money from one jurisdiction to another."The US is not the only country intent on resolving the tax haven problem. In 2005 the European Union adopted the Savings Tax Directive to combat taxes lost to tax havens. European countries like Austria, Luxembourg and, of course, Switzerland have come under pressure to stop their tax haven practices. The Organisation for Economic Co-operation and Development (OECD) is also hot on the pursuit of tax havens. The OECD lists four factors to determine if a jurisduction is a tax haven or not:
"The political climate on the issue of tax havens has changed dramatically over the past three months," says Jeffrey Owens, director of the Centre for Tax Policy Administration at the OECD. Owens has spearheaded the organisation's drive to crackdown on international finance secrecy for more than a decade and says that the financial crisis has intensified the attack on havens.
Antigua and Barbuda Aruba Bahamas Barbados Belize Bermuda British Virgin Islands Cayman Islands Cook Islands Costa Rica Cyprus Dominica Gibraltar Grenada Guernsey/Sark/ Alderney Hong Kong Isle of Man Jersey Latvia Lichtenstein Luxembourg Malta Nauru Netherlands Antilles Panama Samoa St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines Singapore Switzerland Turks and Caicos Vanuatu Forbes magazine reported that the OECD had named four countries Austria, Luxembourg, Switzerland and Singapore that were not making sufficient effort to counter tax evasion and still had retained restrictions on access to banking information for tax purposes. Another report added: "Interestingly enough, Singapore is the jurisdiction that has been favoured by many seeking to remove assets from the European Union and the other nations that signed up to the EU Savings Tax Directive." It warned that Singapore needs to be careful how it pushes the boundaries of secretive banking as "the influence and far reaching authority of the Organisation for Economic Co-operation and Development should never be underestimated." The EU itself is exerting pressure on Singapore to lift its shield on information on European tax evaders. Germany's foreign minister was in Singapore earlier this year and had a "heated debate" on the subject of tax evasion. "The subject is being discussed with a certain amount of emotion in Germany, and rightly so," the German minister said at a news conference, "because (European) states are losing substantive assets when large entities avoid being taxed. I trust this is being understood here. In questions of tax law and tax secrecy Singapore and the European Union are not always of the same opinion. About that we unfortunately have to talk about." Even the chairman of the Swiss Bankers' Association, Mr Urs Roth, is pointing (hypocritical) fingers at Singapore. Comparing his country and ours, Mr Roth noted that Singapore's banking secrecy provisions are even stronger than the ones in Switzerland. He pointed out that while Singapore is not getting as much attention at the moment compared to Switzerland "I would guess that it is a question of time." Jeffrey Owens of the OECD summed up the matter for Singapore most cogently: "The political climate is changing and I do not think that Singapore is correctly reading the political signs that a change is about to come."
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But the world doesn't seem to believe him. US Senator Carl Levin, one of the three co-authors of the Stop Tax Haven Abuse Act, lumped Singapore with the world's leading tax havens. The American lawmaker said of his proposed bill: "In effect, tax havens sell secrecy to attract clients to their shores. They peddle secrecy the way other countries advertise high quality services. That secrecy is used to cloak tax evasion and other misconduct, and it is that offshore secrecy that is targeted in our bill." He identified a Ads
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He is well-read and writes clearly.
This article must be read by all Singaporeans, especially those in the banking insdustry so that they can get ready to pack up.
So now what Andy Xei wrote was correct...Singapore is a money laundering hub for the corrupt Indonesians.
Let's wait and see whether LKY and sissy Loong will start suing Any Xei and Dr. Chee...if they don't sue then what they write about are all correct and if they sue then it shows LKY and Sissy Loong have something to hide.
By next year the USA will be deep into recession. Then we have the exodus of funds...probably a $trillion out of the Singapore based banks, couple with less "spending" tourist and the manufacturing and biotech productions falls to 50% of its previous year level, casinos have just empty tables and slot machines.
Just picture this, with 200,000 to 300,000 high paid and permanent jos in the financial and manufactuing gone for good. This will affect at least futher 500,000 of the related family members. Wow!
LHL would then say: " Singaporeans should thank PAP for giving them so many 'past' good years; lets move on. NO one will be left behind".
He will act on the solution...incease GST to 20% to help the poor!
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