HSBC’s tax evasion scandal arouses debate on British tax system

LONDON, Feb. 17 — The tax evasion scandal of HSBC’s Swiss Private Bank has heateddebates on the intactness of banks’ compliance and regulation, as well as the efficiency oftax system here in Britain.

Experts believe that it is not an isolated case.

The HSBC case is quite different from other recent tax scandals, HSBC has been complicitin clear tax evasion and law breaking rather than legitimate tax avoidance, said CrawfordSpence, Professor at the University of Warwick, in an interview with Xinhu.

“It appears that we need to rely on computer hackers, investigative journalists andcorporate whistle blowers to expose tax evasion. HMRC (British tax authority) should bedoing this as a matter of course, but must be lacking either in resources, political will orboth,” he said.

Earlier this month, International Consortium of Investigative Journalists, a Washington-based publication, reported details on how HSBC’s Swiss unit handled accounts for taxevaders and criminals during the period from 2005 to 2007. This Sunday, HSBC HoldingsPlc’s group chief executive Stuart Gulliver offered the “sincerest apologies” to the public inan open letter that published in several British newspapers.

Spence also pointed out:”The UK tax authorities appear to have been very weak in thiscase. Parliamentarians are calling for a shakeup of how they investigate tax evaders.”
“To my mind, the case raises questions about corporate governance and whether banksthat are ‘too big to fail,’ and are also ‘too big to be well governed’,” he added.

Mark Boleat, Policy Chairman at the City of London Corporation, told Xinhua: “ClearlyHSBC did not have control in place, they did not have the knowledge they should have. Iknow it happened eight years ago, and they had already paid high price today.”

Boleat said he is sure there will be “similar things” happening within other banks.