THE European Union Tax Commissioner Algirdas Semeta has said that Switzerland should eliminate banking secrecy and renegotiate tax accords with the UK and Germany. After the US Tax authorities took down the Wegelin & Co. for helping Americans to indulge in tax evasions , U.K. and Germany have adopted withholding tax accords proposed by Swiss bankers. Semeta said that banking secrecy that allows companies or individuals to hide taxes has no future.

The bilateral tax agreements struck by the U.K. and Germany have been brought to a halt and segments that clash with existing EU rules have been asked to be redrafted. Swiss banks have now planned to levy a 26.375 percent withholding tax on interest, dividends and capital gains earned by Germans with offshore accounts. The revenue generated from this move will go to the German treasury. Under a similar U.K.-Swiss accord, Swiss banks will levy a withholding tax of 48 percent on interest income and 27 percent on capital gains earned by Britons with offshore accounts. A series of loopholes in the agreement will cause the British government to recoup only 10 percent of the 4 billion pounds ($6.3 billion) to 7 billion pounds of revenue envisaged by the bilateral treaty. Switzerland is now under pressure to expand the definition of interest income covered by the accord and to provide greater transparency on those benefiting from money deposited in the world's biggest center for offshore wealth.