Acting to rein in the criminal tax dodgers
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Recent moves to get tougher on cross-border tax cheats will shore up Singapore's reputation as a financial centre where legitimate funds are welcome but tainted money is not. What will make that distinction even clearer is the strengthening of an internat
Singapore’s moves thus focus on making it easier to share information with other countries. They will include signing up to the Organisation for Economic Cooperation and Development’s multilateral treaty on sharing tax details.
Also, the republic will help existing partners under a global standard without having to renegotiate tax agreements. Importantly, the tax authorities here will soon not need a court order to obtain bank and trust information to help other countries.
It was necessary to undertake these measures in an inquisitive international atmosphere where attention has turned to the efforts of financial hubs to combat tax crimes. It is not difficult to see why Singapore has to act. Its openness to the global economy and low tax rates have helped to turn it into Asia’s leading wealth management centre that hosts the world’s highest concentration of millionaires.
According to a study by Boston Consulting Group, the two Asian wealth hubs of Singapore and Hong Kong could overtake Switzerland, currently the largest offshore wealth centre, in due course.
A combination of factors might contribute to such change: pressure on Switzerland to relax its fabled banking secrecy laws; Europe’s economic woes, which have made the recovery of taxes from the rich a priority for fiscally-pressed governments; and Asia’s sustained economic rise.
In this climate, it is natural to look at how seriously countries are dealing with tax dodging.
The latest measures, coming on the back of the announcement on July 1 that Singapore would criminalise the laundering of proceeds from serious tax crimes, make it clear that its reputation for integrity and probity far outweighs any short-term benefits of a laissez-faire approach. Indeed, Singapore’s moves underline the connection between financial integrity and its role as a premier wealth management centre.
Foreign wealth is safest and obtains the best returns in the long term in places where transparent laws working in sync with the best international practices guarantee security.
Systems where it is easy to park suspect wealth tend to be dodgy in other ways as well. The latest measures underscore Singapore’s determination to safeguard its record as a wealth management hub, one built up painstakingly and worth defending assiduously.
