STEP report predicts growing risk of abuse of personal tax data

Tuesday 03 August 2010

A worrying lack of basic measures to protect taxpayers from abuse when governments exchange tax data has been highlighted in a new report by the Society of Trust and Estate Practitioners (STEP), the worldwide professional body for those advising families on trust and estate planning. Under an OECD initiative there are already well over 300 tax information exchange agreements (TIEAs) in place between countries and the number is growing rapidly. STEP’s report highlights the increasing risk that, as the TIEA network grows, countries with poor human rights records and weak data security will gain access to detailed personal financial data on individuals. This could leave law abiding taxpayers and their families vulnerable to issues such as threats from criminal gangs who have gained access to tax data.

David Harvey, STEP Chief Executive, said: “Most TIEAs so far have been agreed between major economies, such as the UK, and other well run countries. There is now strong political pressure to expand the list of countries accessing tax data via TIEAs, bringing in countries where it is harder to be confident that personal tax data will be secure. It is very worrying, therefore, that so far there are no clear plans to ensure minimum standards are in place to protect the public. It seems extraordinary, for example, that the current OECD review process for TIEAs only looks at a country’s performance in providing tax data. There is no check whatsoever to ensure countries receiving data on taxpayers’ financial affairs protect that data and respect personal confidentiality.”

STEP has proposed a set of minimum standards that countries must meet before getting access to tax data from other countries, including minimum standards of good governance, basic data protection measures and a right of redress for taxpayers if things go wrong.

The STEP report can be found by clicking the link below.