Australia 'must act' on tax evasion
The financial centres of Hong Kong and Singapore are becoming more secretive and Australia is lagging in international efforts to curb tax evasion and money laundering.
Research by the Tax Justice Network shows the two Asian jurisdictions remain prime havens for tax evaders and launderers, offering secretive offshore markets that hinder global efforts to stamp out illicit money shifting.
It also highlights several shortcomings in Australia's efforts to improve the transparency of its own financial systems.
The research comes as Treasurer Joe Hockey looks to dump a suite of tax measures announced by Labor, including plans to fight multinational profit shifting.
The Tax Justice Network's financial secrecy index, released every two years, rates countries based on criteria in relation to their ability to promote financial transparency.
The latest index rates Australia 47 out of 100, meaning it must still make "major progress" in offering satisfactory financial transparency.
The report said Australia must take action on several fronts, including banking secrecy and country-by-country reporting requirements.
The network rated Switzerland as the No.1 secrecy jurisdiction in the world. It said Hong Kong and Singapore had crept higher on the index because of their rapid expansion and the displacement of some European and North American offshore activity to Asia.
Mark Zirnsak of the Tax Justice Network in Australia said the increased role of Singapore and Hong Kong in global secrecy was a concern to Australia given the presence of Australian company subsidiaries.
"The ATO has already identified over 100 Australians involved in suspected tax evasion of tens of millions of dollars through the use of 'shell companies' and 'trusts', largely through secrecy jurisdictions," he said.
The report comes as accounting firm Deloitte is accused of advising companies on how to avoid paying tax in some of the world's poorest countries.
But a Deloitte Australia spokesman said the company helped clients "meet their compliance obligations" under international tax laws.
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