Singapore: the one everyone will have to crack

Richard Murphy
Tax Research UK

The Sovereign Society has had this to say today:

“Many of the world’s wealthy have moved from traditional tax havens of the Caribbean, Switzerland and the Channel Islands to Singapore,” says our own Legal Counsel and Offshore Expert, Bob Bauman. “One of the prime reasons for this movement is pressure in those places from OECD member countries, most notably the United States.”

Sovereign Society Council of Experts member – and resident Singapore Legal Counsel – Lawrence Fong explained it to us in greater detail, “With the introduction of EU Savings Tax Directive – especially in financial havens like Switzerland, Luxembourg, and Jersey – Singapore has become a channel for avoiding these intrusive policies.”

“And in recent years, Singapore, known as the country run like an efficient corporation, has changed its marketing strategy… To ensure bank secrecy, Singapore made it a crime to breach the confidentiality of bank customers. They dictated penalties that are even stricter than Switzerland’s confidentiality laws.”

“Singapore companies have also become a much sought after brand in the realm of tax structures. After all, the Republic has a premium reputation of being a first class, legitimate, and respected business arena. Her companies do not get labeled as ‘offshore’ jurisdictions.”

Let’s ignore for a moment that the only reason for wishing to beat the EU STD is to commit tax evasion – which is the sole activity it is designed to address – and the implicit condonement of evasion that the article therefore includes – and note what else the article promotes.

Explicitly it is secrecy: which is why we now call places like Singapore secrecy jurisdictions, not tax havens or offshore jurisdictions.

Second, they aspire to respectability: an aspiration that cannot be achieved as the whole purpose of the secrecy is to undermine the ethics and practices of both the market and international regulation.

Earlier this year I offered a new definition of a secrecy jurisdiction as a “place that deliberately creates regulation for the primary benefit and use of those not resident in their geographical domain and which supports this activity with a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so in their place as usual residence’.

The change in emphasis this makes is important. When tax was the primary focus of concern the secrecy jurisdictions could argue that larger nations were seeking to interfere in their internal affairs. When the secrecy is the focus of attention those larger countries can argue that the secrecy jurisdictions are seeking to undermine regulation in their domains. The focus of legitimacy within the campaign against secrecy jurisdictions has shifted as a consequence.

This is why Singapore will, eventually, be brought to account.

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