Eradication of tax havens "could happen tomorrow", says Tax Justice Network

John Christensen of the coalition queries, however, whether the political will is there to do it...

Eradication of tax havens "could happen tomorrow", says Tax Justice Network

Picture by: Tim Goode / EMPICS Entertainment

Tax havens could quickly and easily become a thing of the past, according to John Christensen, the executive director of the Tax Justice Network.

Speaking to The Right Hook, Christensen said that the Panama Papers have revealed a "systemic problem that needs a systemic solution" but that real political will is the main obstacle to reforms being introduced.

"The Panama business model is entirely based on secrecy," Christensen told Shane Coleman, standing in for Goerge Hook on today's show.

"Secret companies, secret trusts, secret foundations...

"If we wanted to close that down, it could happen tomorrow.

"We could simply have a global requirement that all jurisdictions first of all engage in comprehensive automatic information exchange between tax authorities. That's already the global standard.

"And also we could require that all countries have public registries of the companies that are based and registered in those countries...

"Now that's not beyond the wit of man; it's already G20 policy. All that's needed is the political will to make it happen".

Christensen continued that any bank, accounting firm or big business that wished to trade in countries that did not agree to the requirement would lose their licence and not be able to trade elsewhere, and that it would be "very easy" to put pressure on tax haven states.

Asked why this seemingly simple solution hadn't been attempted before, Christensen said:

"What's interesting about this leak is that it shows how many of the top-end politicians, not only in Britain but around the world, are themselves or them families involved in using [tax havens]".

Holding money in offshore companies is generally not illegal, although it can be used to hide or obscure your financial affairs.

Icelandic Prime Minister Sigmundur Gunnlaugsson has become the first political casualty of the Panama Papers leak.

Gunnslaugsson resigned on Tuesday afternoon after coming under increasing pressure after documents were said to show he and his wife owned in an offshore company holding millions of dollars.

The biggest protests Iceland ever saw ensued, with tens of thousands of protestors gathering outside parliament in Reykjavik yesterday.