19 Jun 2007

US Congress considers legislative changes to tax

10:38 am on 19 June 2007

The United States Congress is considering legislative changes to tax laws that would penalise citizens using Pacific Island countries and others as tax havens.

The Washington Times reports that Internal Revenue Service court filings show Pacific countries like Nauru, Vanuatu, Samoa and the Cook Islands are being used as probable tax havens.

It is suspected that U.S. citizens are hiding possibly trillions of dollars a year, resulting in an estimated annual loss to the U.S. Treasury of more than 100 billion US dollars.

According to the proposed legislation, the money is being hidden or used in bank accounts, phony trusts, shell corporations, and stock and patent activities that have no purpose other than to avoid U.S taxes.

The proposed legislation could pave the way for sanctions, under the U.S. Patriot Act, against nations providing such secrecy in their corporate, bank and tax laws that US tax authorities can't access needed information.