An attempt to stop evidence gathered in a tax evasion investigation being sent
back to the authorities in Australia has been thwarted by the Court of Appeal
in Vanuatu.
The evidence was gathered by officers of the Australian Federal Police during
raids on financial institutions, as part of a wider crackdown by Australia against
offshore tax evasion under the banner of Project Wickenby. The Australian authorities
are focusing in particular on the activities of one tax scheme promoter based in
Perth, Western Australia, who was arrested in April.
The Australian Taxation Office (ATO) is also conducting 80 audits examining
allegedly false tax deductions exceeding AUD90mn (USD84mn) in connection with
the Vanuatu probe.
Earlier in the year, Australian and international agencies conducted operations
across three countries to attack abusive tax evasion schemes linked to Vanuatu,
and Australian Tax Commissioner Michael D’Ascenzo issued a warning that
people who use offshore structures to generate false deductions "or to
deliberately hide assets or income in tax havens like Vanuatu can face serious
penalties including criminal prosecutions.”
The issue has caused divisions in the Vanuatu government. The Financial Services
Authority (FSA), has been keen to cooperate with the Australian and other international
agencies in the investigation, and supports proposals to overhaul financial
services legislation by the end of the year to make the jurisdiction less 'secretive.'
Certain ministers such as Finance Minister Wille Jimmy, on the other hand, are
aghast at the government's appeasement of the onshore authorities, and have
warned that the changes will spell the end of Vanuatu as an offshore financial
centre, which has come to play an increasingly important role in the Pacific
nation's economy.
In a statement issued at the time of the Australian raids, Mr Jimmy said that
this course of action would constitute a "huge blow" to Vanuatu's
economy, and would effectively end its status as a 'tax haven.'
George Andrews, head of the Vanuatu FSC, has countered, however, that it is
no longer desirable for Vanuatu to remained labeled as a "tax haven,"
telling the Australian newspaper that the jurisdiction has "been associated
with this stigma for a long time."
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