Switzerland and the United States are the biggest promoters of financial secrecy according to an index published today by the Tax Justice Network (TJN). The index ranks countries based on their level of secrecy and the percentage of financial services provided to non-residents.
The report said Switzerland, the United States and the Cayman Islands were the world's biggest contributors to financial secrecy.
"Switzerland, the global capital of bank secrecy, retains the worst ranking, and the US has moved up to second [place]," the Tax Justice Network said.
"The top two countries in this year's FSI are the two that have been most resistant to the key policy of automatic information exchange between tax authorities.
According to TJN, an estimated $21 trillion to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions or ‘tax havens’ around the world. These countries typically use secrecy to attract illicit and illegitimate or abusive financial flows.
The first big problem these environments cause is tax abuse, effectively robbing originating countries of the money needed to sustain themselves – but the problems run far deeper than that, JNS said.
Switzerland, a well-known tax haven, whose practices were uncovered by ICIJ’s 2015 Swiss Leaks investigation, is still the worst offender as far as financial secrecy is concerned, according to TJN’s analysis. “Switzerland has delayed the implementation of automatic information exchange, and in 2017 lawmakers attempted to stop it altogether with countries they deemed ‘corrupt’,” the report noted.
As for the United States, it has refused to take part in international efforts to curb financial secrecy and instead set up a parallel system that seeks information on U.S. citizens abroad but does not provide data to foreign countries. Several U.S. states are also considered tax havens including Delaware, which doesn’t tax intangible assets such as intellectual property, patents or trademarks. “More than 66 percent of the Fortune 500 have chosen Delaware as their legal home,” claims the state’s Division of Corporations website.
Top 10 jurisdictions:
United Arab Emirates (Dubai)
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