Hong Kong chief defends city after tax haven row

Saturday, April 4, 2009 at 12:32 AM Posted by Beijing News


Hong Kong's chief executive defended its compliance with global financial reporting standards after a G20 row nearly saw it cited as a tax haven, the South China Morning Post said Saturday.

Donald Tsang said the territory's government had introduced legislation to allow information to be shared with foreign authorities cracking down on tax evasion.

He was speaking after Hong Kong and Macau avoided being named on a list of tax havens worldwide drawn up by the Organisation for Economic Cooperation and Development OECD.

It followed a row at Thursday's G20 summit in London, where China strongly opposed a French proposal to name the two territories.

Eventually the dispute was resolved -- reportedly after the intervention of US President Barack Obama.

Tsang told reporters that Hong Kong -- where corporate tax is 16.5 percent and personal income tax 15 percent -- had "very transparent and very competent and well-respected banking and financial services."

"Our tax rate is low, but that does not mean that we harbour irregularities in our system," he added.

Tsang acknowledged "some concern" about disclosure of personal information, but said steps were being taken to ensure Hong Kong's policies were compatible with international practice.

"If there are any worries in people's minds about the transparency of our system we will certainly dispel those misconceptions," he added.

The OECD published three lists after the Group of 20 summit agreed to crack down on tax havens as part of a wider tightening of financial regulations.

The first named four nations -- the Philippines, Malaysia, Costa Rica and Uruguay -- which it said had not pledged to abide by tax reporting standards, although Uruguay was later taken off after protesting.

A second list named countries that had committed to such standards but not yet fully implemented them, and the third identified 40 that had substantially implemented the norms.





show by Swiss National Circus Knie. REUTERS/Arnd Wiegmann

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