G-20 nations to act tough on tax heavens

G-20 nations to act tough on tax heavens

The representatives of the Group of 20 largest economies in the world have indicated that they will take strict actions against nations that act as tax heavens and fail to comply with the standards of the global financial system.

The group indicated that it will start penalizing nations or territories that do not re information on their banking clients. The move comes following the massive Panama Papers leak that created global anger over tax evasion. The group's finance ministers and central bankers said in a statement on Friday in Washington that the group will consider defensive measures against such financial centres. They said that such nations or territories must comply with international standard requiring the exchange of information about account holders.

The statement also said that the group will work with the Organisation for Economic Co-operation and Development (OECD) to identify 'non-cooperative jurisdictions' by July. The pointed out that the pointing out who controls legal tax entities is essential to the international financial system.

The statement referred to the global standard developed by the OECD that were endorsed by the G-20. These standards require tax jurisdictions to share information each year about their banking systems, including the names and tax identification numbers of account holders.