* Minister questions tax evasion/tax fraud distinction
* Time to bring Switzerland in line with other countries
* Another blow to banking secrecy
By Jonathan Lynn
GENEVA, Feb 21 Switzerland's justice minister
questioned on Sunday whether tax evasion should continue to be
treated as a misdemeanour rather than a crime, in another blow
to the country's cherished banking secrecy.
Switzerland has already abandoned the distinction between
tax evasion -- failing to declare your income or wealth to the
taxman -- and tax fraud -- deliberately misleading the revenue
-- for foreigners investing money in the country.
Last year Switzerland was forced to help the U.S.
authorities investigate tax evasion by thousands of Americans
investing in Switzerland to resolve a case brought by the U.S.
authorities against UBS UBSN.VX.
That lawsuit threatened to bring down the giant Swiss bank
with disastrous results for the Swiss economy.
Switzerland has also been forced to renegotiate
double-taxation agreements with other countries that recognise
tax evasion as a crime not protected by banking secrecy, under
sustained pressure from Germany and other European states.
Swiss tax authorities should be treated in the same way as
foreign ones, Justice Minister Eveline Widmer-Schlumpf said in
an interview with the weekly NZZ am Sonntag.
"The question arises whether in the long term we should
abolish the distinction between tax fraud and serious cases of
tax evasion domestically as well," she was quoted as saying.
The independent-minded Swiss, with a centuries-old suspicion
of government, believe that an individual's financial affairs
are his or her own business.
While consciously lying to the revenue authorities, for
instance forging documents about income, is a crime as
elsewhere, simply omitting to report earnings is currently an
administrative offence punishable by a fine.
Because tax evasion is not a crime in Switzerland, requests
from other governments for help with investigations into the tax
affairs of their own citizens investing in Switzerland were
politely turned down for years, even if tax evasion was a crime
in the investor's own country.
The Swiss authorities would only help if they were shown
evidence that a crime under Swiss law -- a deliberate fraud --
had been committed.
Long-standing laws making it a crime in Switzerland to
provide details of an individual's bank accounts bolstered this
The financial crisis, which has drained the coffers of many
rich countries, has encouraged them to step up efforts to
collect tax on wealth concealed abroad, with accounts in
Switzerland a prime target.
Widmer-Schlumpf said the Swiss authorities would not help
foreign tax authorities with investigations into tax cases that
were based on stolen bank data. Germany said this month it would
pay 2.5 million euros for stolen Swiss bank data with details of
tax evaders. [ID:nLDE61E10D]
The tax evasion proposal is likely to be highly
controversial in Switzerland.
But Widmer-Schlumpf said it was unfair that some people
could hide large sums for many years and be treated much more
lightly than others concealing small sums but falsifying
documents to do so.
It would still not be a crime to evade taxes if you simply
forgot to declare income or wealth, rather than repeatedly
concealing it, she said.
(Reporting by Jonathan Lynn; Editing by Jon Boyle)