Colombia tax evaders have $50B parked in tax havens: Minister
Colombia’s minister of finance stated this weekend that Colombians are hiding $50 billion abroad in an attempt to avoid paying taxes over their assets.
Finance Minister Mauricio Cardenas told Spanish news agency EFE that no penalties for Colombia tax evaders had been finalized, but that they were on the agenda.
“We are giving a stimulus, it is not important why he did not testify in the past, or what reasons had to remove it from Colombia , we are saying to declare their assets to pay a penalty of 10 percent of its assets . ” said Cardenas.
Cardenas, suggested that about 50 billion dollars are hidden by Colombians in foreign banks, money which he states should be used to help the poor in Colombia, and fund the post-conflict process in the aftermath of the Cuba peace talks.
Cardenas said that it is “a fight against evasion” and a struggle to improve the quality of life of Colombias poorest people, because the taxes recieved would be used in social policies.
Cardenas announced the hard-line policy on tax evaders after Colombia finally came to an agreement with Panama to share financial information, after a tense period of relations between the bordering countries, since Colombia declared Panama a tax haven at the start of October.
“We’ve spent years asking and have finally got that Panama agrees to negotiate an agreement whereby we will exchange financial information with Colombia,” said Cardenas.
The disagreement between the bordering countries took root in the fact Panama refused to share financial information with Colombia, who is desperate to track down Colombians who are hiding their money abroad.
At the heart of the conflict was an estimated $2 to $7 billion in losses for the Colombian government, which is already experiencing a fiscal gap of $6.5 billion, as citizens continue to hide money in Panama and other countries as a means of avoiding taxation.
In an attempt to stop this activity, Colombia requested that Panama sign a bilateral tax information exchange agreement.
When the Panamanian government refused, Colombia declared Panama’s status as a tax shelter by means of retaliation, meaning that money transfers to that country will be taxed with 33% rather than the normal 10%.
MORE: Colombia and Panama continue to lock horns in tax haven battle
The Colombia and Panama governments came to an agreement on October 21, and an information sharing pact was signed.
MORE: Colombia agrees to take Panama off tax haven list
“Achieving an agreement to exchange tax information with Panama and Financial is an important step in international cooperation in the fight against money laundering and tax evasion ,” said Cardenas in response to the agreement.
The deadline for the exchange of information which will enable Colombia to know how many of the tax evaders assets are in Panama expires on September 30, 2015.
With a huge national debt and spiralling costs for the ongoing Peace talks and estimations for the post-conflict process, Colombia will be keen to sniff out those who are not willing to pay their dues in taxes with the help of their newly rekindled friendship with neighbouring Panama.
