Australian Government Urges Clemency Over Pacific Tax Havens

by Mary Swire, Tax-News.com, Hong Kong

04 March 2002

Australia has urged the OECD to consider the special challenges faced by small Pacific offshore jurisdictions following the passing of the February 28 deadline for cooperation on tax and transparency issues.

Several of the Pacific countries included on the OECD blacklist, for example Nauru and Vanuatu, announced last week that they rejected the multilateral organisation's demands, urging the OECD to create a level playing field by forcing developed countries such as Luxembourg and Switzerland to cooperate. They also explained that unlike the more advanced, primarily Western OECD member states, the economies of small developing island states cannot survive without the revenue generated by the provision of offshore services.

In a statement released on Friday, Australian Foreign Minister Alexander Downer announced his country's support for the Pacific island havens, and asked the OECD to consider their actions in the context of a very specific set of circumstances:

'International cooperation against systematic tax evasion is consistent with the Government's own efforts to prevent tax evasion and the erosion of Australia's revenue base,' he explained. 'But the Australian Government has consistently emphasized that the concerns of small states and the special challenges that they face must be addressed if the initiative is to succeed.'

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