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

The tax evasion scandal of HSBC's Swiss Private Bank has heated debates on the intactness of banks' compliance and regulation, as well as the efficiency of tax 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 complicit in clear tax evasion and law breaking rather than legitimate tax avoidance, said Crawford Spence, Professor at the University of Warwick, in an interview with Xinhua.

"It appears that we need to rely on computer hackers, investigative journalists and corporate whistle blowers to expose tax evasion. HMRC (British tax authority) should be doing this as a matter of course, but must be lacking either in resources, political will or both," 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 tax evaders and criminals during the period from 2005 to 2007. This Sunday, HSBC Holdings Plc's group chief executive Stuart Gulliver offered the "sincerest apologies" to the public in an open letter that published in several British newspapers.

Spence also pointed out: "The UK tax authorities appear to have been very weak in this case. Parliamentarians are calling for a shakeup of how they investigate tax evaders."

"To my mind, the case raises questions about corporate governance and whether banks that 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: "Clearly HSBC did not have control in place, they did not have the knowledge they should have. I know 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. Endit