Ladies and Gentlemen,
I wonder whether the days of money laundering and lenient tax jurisdictions days for Singapore are coming to an end, thanks to Obama and his FATCA. It stands for Foreign Account Tax Compliance Act passed in the US in 2010.
It all started with the huge numbers of Americans banking in Swiss banks to avoid US tax under the fiction of banking secrecy and thereby conveniently avoiding the need to report on account holders. It was very good for Swiss banks but not so good for the US government. Billions of tax dollars being lost and it became time for Obama to put a stop to this.
Under this law, foreign financial institutions are required to report the names, account numbers and US social security numbers of Americans as well as their balances and transactions, failing which the financial institution was liable to a 30% tax withholding, which if they do, results in it no longer being competitive.
You have heard of the US government suing the Union Bank of Switzerland in Florida some years ago, where they reached a settlement. Now for Americans it no longer makes sense to think of Swiss bank and make a killing in tax dollars. It does not work.
And the idea of giving up American citizenship is not going to help you either. There is a hefty penalty for that too.
This pursuing of American tax cheats is not limited to Switzerland. They have the same reporting requirements for Singapore banks or any other foreign jurisdiction such as the Caymans. In fact many Swiss banks are now telling Americans that they simply don't want their business. They are telling them to take their money and go elsewhere. Too much trouble and expense in complying with all these American requirements, they say.
But have you thought about it? Are not the Chinese also unhappy with their citizens stealing their money and parking it in Singapore? Don't they want a share of their taxes too? Then what about the rich Russians, Indians and Indonesian crooks? What if China, whose nationals have the largest number and biggest accounts in the island, now tells Singapore that they too want a list of the names of Chinese account holders in Singapore banks?
I think the countries who are losing their wealth to money laundering centers like Singapore are wising up. They have seen what the US is doing and they can do it too. And the danger to Singapore is when every other country demands the same information on their nationals, this whole idea of money laundering tax havens like Singapore will come to an end.
I think the writing is on the wall. I don't think dirty business such as money laundering and tax havens have any future under the Sun. Once everyone does what America is doing, which I think is going to happen, Singapore's days of laundering dirty money will come to an end. As they say the party does not last forever.
Which brings to my mind, the island of Nauru in the Pacific. They too were once a money laundering center which came to an end. I think they are now looking into the business of selling sea shells.
PS. By the way, I am writing this with a cursory reading of tax evasion laws of the US. I am not an authority on the subject, so please don't ask me details on this. I am not prepared to spend time researching it. You can do it yourself. Thank you.
Attorney at Law
A Singaporean in Exile
Fremont, California USA
Tel: 510 491 8525