Top officials reject label of tax haven
Updated: 2009-04-04 07:50
(HK Edition)
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HONG KONG: Top SAR government officials yesterday set out to refute arguments under which the city has been characterized as a tax haven by some foreign authorities.
The Organization for Economic Cooperation and Development (OECD) yesterday released a "blacklist" identifying Costa Rica, Malaysia, the Philippines and Uruguay as "non-cooperative tax havens".
The "blacklist" was part of efforts agreed among world leaders at this week's Group of 20 summit to crack down on tax evasion.
Media reports said earlier that France President Nicolas Sarkozy insisted on including Hong Kong and Macao on the list.
"We have a very simple tax system. We have a low tax rate. We have a very transparent and very competent and well-respected banking and financial services. Indeed, our tax rate is low, but that does not mean that we harbor irregularities in our system," Chief Executive Donald Tsang said at a press conference yesterday.
He also acknowledged there were concerns about Hong Kong's disclosure of personal information for tax purposes by other administrations.
Before Tsang made his remark, Secretary for Financial Services and the Treasury Chan Ka-keung made similar comments.
"We have a simple and clear-cut tax system. We don't have bank secrecy laws. And we aggressively clamp down on money laundering," Chan told reporters.
He said the city's government will seek to sign bilateral agreements with many countries on avoiding double taxing.
The SAR government will also revise the existing tax codes to improve Hong Kong's tax information exchange mechanism with other economies, he added.
Tax professionals said speculations about Hong Kong being targeted as a tax haven could be due to the fact that the city has a low tax rate and hasn't implemented an information exchange mechanism that meets OECD's standards.
"However, Hong Kong is committed to improving its tax system," said Phillip Hung, a vice president of the Tax Institute of Hong Kong.
He noted that Hong Kong's tax authority is on course, drafting revisions to its tax codes to make them conform more closely to OECD standards in regard to transparency and the exchange of information.
"We welcome the news that Hong Kong was not included on the 'blacklist', as an inclusion could bring about many barriers to businesses operating here," Hung said.
G20 leaders earlier pledged to take action against so-called non-cooperative tax havens, including sanctions.
The OECD also published a separate "grey list" of countries that have agreed to improve transparency but have not yet signed the necessary international accords. The list included Luxembourg, Switzerland, Austria, Belgium, Singapore, Chile, the Cayman Islands, Liechtenstein and Monaco.
The non-cooperative tax havens are considered safe harbors for foreign tax dodgers who park billions of dollars out of reach of their home authorities.
China Daily - Agencies
(HK Edition 04/04/2009 page2)