Development organizations launch campaign against «Tax haven Switzerland»

13. May 2003

Berne, 13.05.2003 - The Swiss Coalition of Development Organizations and the Berne Declaration accuse Switzerland of favouring worldwide tax fraud and tax avoidance, thereby causing massive revenue losses to developing countries. To stop this outflow of funds, the agreement with the EU on taxation of savings income must also be extended to developing countries. In the medium term, the distinction between tax evasion and tax fraud must be eliminated, as it one-sidedly favours rich foreigners who often originate from poor countries where they pay no taxes. The two development organisations wish to advocate, not just in Switzerland but worldwide, that the "Profiteers of globalisation must again be made to pay taxes". Along with representatives from England (a former Adviser to the Government of the Jersey tax haven) and Germany, they presented the global "Tax Justice Network" in Berne, which coordinates activities across several countries. It is made up of organisations and eminent persons from several European and American countries. In Switzerland, the two NGOs are endeavouring to win over more organisations for an “Alliance for Tax Justice”.

The Swiss Coalition and the Berne Declaration are critical of the one-sidedness of globalisation. Thanks to the worldwide liberalisation of capital movements, globally active firms and extremely wealthy individuals are finding it increasingly easy to circumvent regular taxation, observes Andreas Missbach of the Berne Declaration (BD). Offshore business dealings conducted through tax havens have now become one of the main fields of business worldwide. Multinational corporations are declaring their profits where taxes are lowest. This is why the bookkeeping for more than the half of world trade is done through tax havens. But wealthy individuals too prefer to place their money in tax havens such as Switzerland rather than allow it to be taxed in due and proper form. "If the wealthiest segment of society withdraws from the social pact", then social cohesion and democracy are jeopardised", Missbach warned. Tax avoidance and tax competition are leading to massive revenue losses particularly for developing countries. Estimates put the figure at 50 billion dollars – just as much as is being disbursed for development aid worldwide.

Demands to the Federal Council

Switzerland continues to play in a central role in „aiding and abetting international tax evasion“, said Bruno Gurtner of the Swiss Coalition of Development Organizations Swissaid, Swiss Catholic Lenten Fund, Bread for All, Helvetas, Caritas and Swiss Interchurch Aid. He called on the Federal Council to extend the agreement with the EU on the taxation of savings income to include developing countries. "If Switzerland were to do this, developing countries would receive more funds than Switzerland is currently providing as development aid," said Gurtner. Switzerland must end „government encouragement of tax evasion by wealthy foreigners“ and do away with its distinction -- unique worldwide -- between tax fraud and simple tax evasion. Gurtner further demanded that it should cease its resistance to the OECD programme for the elimination of harmful tax practices and better monitor and regulate the offshore activities of Swiss companies.

Global „Tax Justice Network“

To coordinate and strengthen endeavours toward greater international tax justice, the Swiss Coalition and the Berne Declaration have collaborated actively in creating a global network. “The international Tax Justice Network shows that criticism of Switzerland is not simply the result of envy and competition between financial centres", it was stated at the press conference. For after all, also participating was a representative of a British organisation that is a member of the Network. John Christensen, former Economic Adviser to the Government of the British Channel Island of Jersey, pointed out that the one-sided orientation toward the financial services business was creating serious social and economic problems for the British Channel Islands and was skewed towards benefiting huge conglomerates. "They too must realise that worldwide criticism of their policies is warranted, and try to find new economic strategies as a matter of urgency.