Wednesday, April 4, 2012

Which one is an offence - Evading the tax or investigating it?

Interesting news from Europe - 'Swiss seeks the arrest of 3 German tax officials over stolen banking data'.

What makes this one interesting is what the stolen data contains? It’s a CD which contains the information related to Swiss account holders. German tax inspectors paid a hefty $3.3mn for the CD - making it as one of the most expensive CD's in the world. The CD bought on Feb 2010 was already used by authorities from Rhine - Westphalia and other German states to start more than 1000 investigations against tax evasion. Well Germany taxmen showed what they can do.

I think it is already late for Swiss administration to re-think about their banking secrecy laws. Why people will take all the strains to deposit money in Swiss banks, even when there were so many banks close to them? Is it only because the excellent services provided by Swiss banks?

If Swiss wants to protect their secrecy laws, well. Nobody will have any problem if it is applicable to Swiss nationals only. For others let’s allow the laws of their native country or atleast international laws. There is so much wealth in Swiss banks which are legal or illegal but not taxed in most of the cases. Everyone can't go to Switzerland to save the taxes. So it will be better for the Swiss authorities to create a framework which will enable other governments to tax the amount and take appropriate actions.

Every government agencies may not be so strong as IRS or rich enough like Germen Tax authorities. But they too have a right to collect tax and question the illegal deposits.


Photo Courtesy - Wikipedia, later edited to suit this article.

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