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Move on tax information sharing ‘step in the right direction’

Decisions by the Isle of Man and Jersey to automatically exchange tax information about savings account holders with other European Union governments are welcome, Christian Aid says today.

The governments of both islands have said they will move to automatic information sharing with European Union (EU) governments in July 2011, instead of taxing the interest paid to account holders and hiding their identities.

‘These are steps in the right direction,’ says Christian Aid tax policy expert Dr David McNair. ‘To combat tax dodging, which robs developing countries of more than $160 billion a year, it is vital that governments share information about people who hold wealth within their borders.’

The information that is to be disclosed by the Isle of Man and Jersey will be shared only with governments within the European Union. At present, both islands automatically deduct tax from the interest paid to account holders from other countries in the EU, and return most of it to their respective governments, without revealing account holders’ identities.

To ensure that developing countries benefit from this new information sharing, Christian Aid is campaigning for the introduction of automatic, multilateral sharing of tax information between governments across the world.

Existing bilateral information exchange agreements are so cumbersome that they are rarely used, even by governments with well-resourced tax authorities. They are of little value in combating the tax evasion suffered by developing countries.

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For more information, contact Rachel Baird on 0207 523 2446 or 07545 501 749 or rbaird@christian-aid.org

Christian Aid works in some of the world's poorest communities in nearly 50 countries. We act where the need is greatest, regardless of religion, helping people build the life they deserve.