MercoPress. South Atlantic News Agency

US Senate accuses European banks of helping tax evaders

A US Senate subcommittee accused banks in Switzerland and Liechtenstein of helping wealthy US citizens commit massive tax evasion, and urged the establishment of tougher laws to combat offshore tax havens around the world.

In a recent report the Senate subcommittee on investigations estimated that offshore abuses were costing US taxpayers about 100 billion US dollars a year. It recommended a range of reforms to snuff out tax cheats, including more stringent US requirements for foreign banks and harsher penalties for financial institutions failing to provide the Internal Revenue Service with details on all accounts their US clients are holding. "Tax havens are engaged in economic warfare against the United States and the honest, hardworking American taxpayer is losing," said Senator Carl Levin, chairman of the subcommittee on investigations. "The iron ring of secrecy around tax haven banks and their deceptive banking practices enable and encourage tax cheats to hide assets from the United States," the Michigan Democrat said. "Congress needs to enact strong penalties on tax haven banks that help US taxpayers avoid paying taxes to Uncle Sam". The panel's ranking Republican agreed. "It is simply unacceptable that some individuals are using offshore tax havens and secrecy jurisdictions to shelter trillions of dollars from taxation, forcing working families to shoulder the burden," Senator Norm Coleman of Minnesota said, adding that foreign banks were "exploiting gaping loopholes" in US law to act as "Al Capone safe houses for evading taxes". The 109-page report took aim specifically at Switzerland's UBS AG, arguably the world's largest wealth manager, and Liechtenstein's LGT group, owned by the principality's royal family.