Swiss Reject Chirac’s Tax On Banking Secrecy

by Ulrika Lomas, Tax-News.com, Brussels

31 January 2005

Representatives of the Swiss government and banking industry have reacted with a mixture of anger and bemusement to French President Jacques Chirac’s proposal for an international tax, including a charge on countries retaining banking secrecy, to help alleviate third world poverty.

In a speech to the World Economic Forum in Davos last week, Chirac, a long time advocate of a international ‘Tobin tax,’ suggested a number of “experimental” measures, such as a tax on international financial transactions or airline tickets, to raise up to $10 billion in funds which would be used to fight the AIDS epidemic gripping certain poor nations.

However, Chirac's proposal to impose a charge on countries which retain banking secrecy, intended to recover revenues lost from tax evasion, have provoked the ire of the Swiss, and Finance Minister Hans-Rudolf Merz dismissed his idea as nothing more than “interference” in domestic Swiss policy.

“The French president has the right to express himself about these issues, but he has to accept the fact that we have our own policy rules and a clear policy on banking secrecy. These issues can be raised in bilateral negotiations at which we will continue to defend banking secrecy,” Merz told reporters.

Meanwhile, the Swiss banking industry was more scathing, branding Chirac’s proposals “bizarre” and “confused.”

"The idea is rather bizarre and has a ring of Saint-Simon and early 19th century utopian socialism about it," Swiss Bankers Association spokesman James Nason told the news service Swissinfo.

“A far better idea would be if the oh-so-pious French were to impose a tax on nasty tin-pot dictators who purchase real estate on the Côte d'Azur, topped up with a tax on French bank loans and arms sales to countries with brutally repressive regimes," remarked Mr Nason.

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