INTERNATIONAL Monetary
Fund (IMF) has advised Singapore to pursue tax evasion by non-residents
as a predictive crime.
In its latest country report Singapore, IMF observes: "Recent
public reports that Singapore's foreign banks, companies and trusts may
have permitted nonresidents to conceal beneficial ownership of assets
for the purpose of evading taxes in other jurisdictions could expose
Singapore to reputational risk, with negative implications for financial
and external stability."
The
report captioned ' Singapore-Staff Report for the 2013 Article IV
Consultation' has a appendix on Singapore's Risk Assessment Matrix. It
has listed "reputational risk from opaque ownership structures in the
offshore wealth management"as one of the sources of risk."
As for the expected impact of this risk, the Report says: "If
risks are not adequately addressed, changing perceptions about
Singapore's good reputation could lead to closing of accounts, with
adverse effects on the viability of the industry, and knock-on effects
to related tax revenue and employment."
It
notes that assets under management have grown rapidly, and are now over
US $1.3 trillion. The financial and business services sectors comprise a
combined 25% of GDP.
The appendix lists recommended policy response as: "Effective
implementation of international AML (anti-money laundering) standards,
particularly relating to transparency of companies and trusts, and
pursuing tax evasion as a predicate crime. Ensure service providers
report suspicious transactions and close accounts where supporting
evidence of beneficial ownership is incomplete."
Singapore
authorities' view on concern voiced by the Report is that: "Singapore
has implemented stringent measures as part of international efforts to
combat money laundering and terrorism financing, and tax evasion. On
tax, the "exchange of information"regime is aligned to
internationally-agreed standards, and since July 2013, Singapore has
criminalized the laundering of the proceeds of tax evasion and tax
fraud."
The
issue of tax evasion by non-residents has figured another IMF report on
Singapore's Financial System Stability Assessment (FSSA) report.
The
'Singapore-Staff Report for the 2013 Article IV Consultation' report
has also discussed Singapore's fiscal stance and budget including recent
and expected tax changes.
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