EU Tax Chief Urges End to Swiss Banks' Secrecy to Fight Evasion

European Union tax chief Algirdas Semeta is pushing for Switzerland to end its bank secrecy laws in order to combat tax evasion and make more information on clients available.

Speaking at a meeting in Bern, Switzerland with the country's finance minister, Eveline Widmer-Schlumpf, the European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud urged officials to negotiate data protection terms.

"It is widely accepted that the era of bank secrecy is over," he said. "Switzerland can gain from a stronger tax agreement with the EU with automatic exchange of information at its core.

"It would be a clear signal from Switzerland that it supports fair play."

Switzerland is infamous for stringent bank secrecy laws and has become the world's largest offshore financial centre with $2tn (€1.5tn, £1.3tn) in assets under management.

Tax avoidance involves companies legally reducing their tax burdens, wherever their sales have taken place, by housing certain units under different jurisdictions and using complex tax accounting rules.

Tax evasion is an illegal practice where a person, organisation or corporation intentionally avoids paying their true tax liability and can be subject to criminal charges and substantial penalties.

Tax evasion costs the UK an estimated £5.2bn a year in lost revenues.

However, world leaders say that the lack of transparency over huge corporations declaring their tax payments to countries where they have conducted sales is exacerbated by secrecy laws in tax havens.

"For Switzerland it is important that we continue to engage ourselves for a level playing field, not just within the EU but beyond the EU," said Widmer-Schlumpf.

She added that the Swiss government would have to wait until autumn for formal talks with the EU.

In May, Australia's government rallied behind fellow G20 leaders with a call to eliminate corporate tax avoidance and evasion by closing loopholes ahead of its chairing of the group in 2014.

David Cameron has placed tax avoidance and evasion at the top of the G8 agenda in Northern Ireland but the political turmoil in Syria is dominating talks and overshadowing plans to tackle tax loopholes.