Tax Havens Dominate List of Largest Account Balances in Australia

A recent analysis of data from the Australian Tax Office (ATO) has raised concerns about the prevalence of tax havens among account holders with large balances. The study, conducted by Mark Zirnsak, found that 84 million accounts holding €10 trillion ($15.6 trillion) in assets had a disproportionate number of accounts linked to secrecy jurisdictions.

Top 10 List of Average Account Balances

The top 10 list of average account balances was dominated by notorious tax havens, including:

• The Marshall Islands: with an average account balance of $2.9 million and 164 accounts, totaling nearly half a billion dollars in Australian financial institutions.
• Tuvalu: with an average account balance of $1.4 million and 34 accounts.
• British Virgin Islands: with an average account balance of $1.2 million and 124 accounts.

These jurisdictions are known for their low or non-existent taxes, relaxed regulations, and lack of transparency, making them attractive to individuals seeking to hide their wealth.

Concerns and Calls for Action

Zirnsak expressed concerns that some of the money may be laundered through Australia or used to conceal ownership by Australians. He also called for greater transparency and a public register detailing the beneficial ownership of companies and trusts to prevent money laundering.

• The ATO has responded by saying it has information-sharing arrangements with six of the 10 jurisdictions identified, including Jersey, Cayman Islands, Bermuda, Antigua and Barbuda, Guernsey, and Gibraltar.
• The tax office also highlighted its efforts to minimize tax avoidance and combat offshore tax evasion through its Tax Avoidance Taskforce.

Criticism and Suggestions for Reform

However, critics argue that more needs to be done to prevent money laundering and tax evasion. Zirnsak suggested that Australia’s anti-money laundering laws should be reformed to require businesses and professionals to report suspicious matters to the regulator, AUSTRAC.

International Efforts

The data also showed that US resident companies and individuals had the largest total account balance, followed by China, the UK, Singapore, and New Zealand. However, the disproportionate presence of tax havens on the list highlights the need for greater transparency and regulation in the financial sector.

As international efforts to combat tax evasion and money laundering continue, it is clear that more needs to be done to address the issue of tax havens and ensure that financial institutions are aware of who they are doing business with.