Response to "As simple as black and white?" - STEP Journal, February 2012
2 March 2012
Editor STEP Journal
I refer to the article "As simple as black and white?" (STEP Journal, February 2012) by Paul Hunter and Daniel Bisson. While the article correctly observes that individuals intent on engaging in unscrupulous behavior can be brought to justice under Singapore’s tax regime, it contains inaccuracies about the exchange of tax information and mutual legal assistance regimes in Singapore.
2 First, the article suggests that Singapore applies the ‘judicial process’ to all tax information requests. This is incorrect. In Singapore, the judicial process is applicable only where the request relates to protected information such as a bank customer’s information. Furthermore, approval by the OECD was never needed for Singapore to amend her treaties for such a purpose, as alluded to in the article.
3 Second, under the ‘judicial process’ it is the Singapore Courts, and not the Monetary Authority of Singapore, as the article erroneously states, that have the power to lift banking confidentiality for Singapore to assist in bona fide requests. This is intended to ensure a fair and independent assessment of the validity of requests, and not to frustrate or delay information exchange as suggested by the article. In this regard, Singapore’s exchange of information (“EOI”) regime is consistent with the internationally agreed standard for the EOI found in Article 26 of the OECD Model Tax Convention on Income and on Capital. Singapore permits the exchange of tax information for purposes ranging from tax administration to enforcement of domestic tax laws of treaty partners. As of 29 February 2012, Singapore has 16 tax treaties in place with G20 members, not 15 as stated in the article.
4 Third, contrary to what the article states, since April 2006, a bilateral treaty is no longer a pre-requisite for Singapore to provide mutual legal assistance to any country which is prepared to reciprocate such assistance. Many countries have obtained assistance from Singapore on this basis.
5 One point that the article had missed is that the successful development of Singapore’s financial sector has been consistently underpinned by high standards of financial regulation and supervision. Singapore’s banking and financial system is open and transparent, and the rules rigorously enforced. As an international financial centre, Singapore is committed to being a responsible jurisdiction in the area of international cooperation, which includes offering assistance on bona fide requests for tax related information.
6 I would be grateful if you could publish this letter in full so that your readers will be accurately informed about Singapore’s exchange of information and mutual legal assistance regimes.