OECD chief: Era of banking secrecy is over

A crackdown on banking secrecy has brought governments some 14 billion euros ($20 billion) in additional revenue over the last two years, the head of the OECD said in a report Thursday. "The era of bank secrecy is over," Organisation for Economic Cooperation and Development chief Angel Gurria told the leaders of the Group of 20 leading economies meeting for a two-day summit at the French resort of Cannes in a report. "It is now no longer possible to hide assets or income without risking detection," said Gurria, whose organisation hosts a G20 effort to eliminate banking secrecy. The crackdown was launched in 2009 in the wake of the global financial crisis and has since brought in 14 billion euros in additional tax revenues, according to information from 20 countries. International financial institutions have estimated that developing countries may be losing $200-$400 billion a year from tax evasion. "Their shared determination to end offshore abuse is enabling them ... to crack down on offshore tax evasion," he added in the report. This has improved the fairness of tax systems as most of the additional revenue has been secured from wealthy citizens attempting to evade taxes, according to the report. "At a time when many governments are having to ask their citizens to accept higher taxes and reduced public services, it is important that everyone pays their fair share," it said. More needs to be done however, the OECD report noted, as billions in undeclared assets remain stashed in offshore banks, who use secrecy laws to help clients avoid paying taxes in their home countries. It said more countries need to join the information exchange which allows catching tax cheats as well as making this process more automatic. Tax and law enforcement bodies need to improve their cooperation to combat illicit financial activities effectively, as well as dedicate more resources to the effort. The OECD also said Thursday that all G20 nations have now agreed to a multilateral convention on tackling tax evasion. "Today we have taken a major step forward to improve global tax cooperation," said Gurria.