Samoa offshore industry's tax secrecy is facing a new threat
Tax secrecy in Samoa’s offshore industry is facing a new threat to revenues with the signing of a major tax agreement between China and other tax authorities this week.
The agreement means China now joins 56 other countries who have signed up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
The Tax Justice Network says the agreement marks a still significant development in terms of a global crack down on tax avoidance and evasion.
“Just two or three years ago, we at TJN felt as if we and only a very small band of others were lone voices in the wilderness, pushing as hard as we could against the OECD's line that it's nearly-useless 'on request' system of information exchange was the internationally accepted standard.
“Automatic information exchange was the way to go, we said, but we were dismissed as extremists.”
Samoa has previously been one of the blind spots for China in terms of exchange of tax information.
News of the historic tax agreement comes as companies continue to pull out of the Samoa offshore industry, using a liquidation service based in the Cook Islands.
Samoa was counted by the Globe and Mail, a Canadian newspaper, as being among 27 countries with the second highest levels of secrecy in the offshore world.
Nauru and the Maldives were ranked first for global secrecy.
The world’s leading source of scrutiny on secret banking is the Financial Secrecy Index (FSI), a ranking system set up by Tax Justice Network.
On the index, Samoa ranks at 68 of 75 countries for least transparent –most secret – or 11th in the world.
In the FSI, Samoa is given a secrecy rating of 85, with the most secret going to Nauru at 93, although the TJN says this rating has been “*Temporarily withdrawn pending legal interpretation.”
On a global scale weight for all finance centre activity, Samoa falls well down the list, among the four least significant, along with the Cook Islands, Dominica and Vanuatu.
By comparison, the United States, the United Kingdom Luxembourg and Switzerland rank as the four top finance centres accounting for more than half of global secrecy activity.