Singapore to step up international cooperation on tax evasion

Singapore, the world’s fourth-biggest offshore financial centre, said on Tuesday it will adopt new measures to make it easier to share information on potential tax evaders with other countries.

The Southeast Asian city-state, keen to avoid the kind of onslaught on tax cheats being waged against Switzerland, said it will sign up to the Organisation for Economic Cooperation and Development’s (OECD) multilateral treaty on sharing tax details.

It is expected to sign up to the Convention on Mutual Administrative Assistance in Tax Matters some time this year.

The government also plans to change the law so that the tax office, the Inland Revenue Authority of Singapore, will not need a court order to get information from banks and trust companies sought by foreign governments, a joint statement by the central bank, the finance ministry and the tax authority said.

The move comes as the Group of 20 leading economies (G20) is pushing for all countries to improve the way they share tax information.

Governments in Europe and in the United States have been stepping up their efforts top clamp down on tax evasion as they try to deal with rising levels of public debt.

“These changes we are now making are a major enhancement, in step with the strengthening of international standards for exchange of information,” said Tharman Shanmugaratnam, Singapore’s deputy prime minister and minister for finance.

Singapore, which hosts offices of the world’s biggest banks, will adopt the OECD standards on information sharing in all of its existing bilateral tax agreements that do not already contain them, as long as it gets reciprocity.

Once the OECD-related measures are in place, Singapore will meet the international standards on tax information sharing with up to 83 different jurisdictions, up from the current 41. Those new countries include the United States and Brazil.

Singapore is already bringing in stricter rules that compel financial institutions to identify accounts they strongly suspect hold the proceeds of fraudulent or wilful tax evasion and, where necessary, to close them before July 1.

After that date, handling the proceeds of tax evasion will be a criminal offence under changes to Singapore’s anti-money laundering law.

Reuters