FILE PHOTO: BHS employees carry shopping bags to collect their wages in Ilford, Britain, January 7, 2016. REUTERS/Neil Hall/File Photo
LONDON (Reuters) - Britain could learn some lessons about its fight against retail firms with major tax avoidance or tax evasion from a whistleblower in Singapore who recently revealed hundreds of millions of pounds of assets owned by Burberry.
The fashions label, famous for its camel, red and black check, which moved its money to Britain, said it would open its books to tax authorities at Singapore’s tax authority, the IRD, after being alerted to “structural issues” at its Asia-Pacific HQ.
Burberry (BRBY.L) has said it was “looking forward to a mutually beneficial working relationship with the IRD” and a spokesman confirmed that it expected to pay the Singapore tax authorities.
The timing of the leak of details of Burberry’s estimated $190 million in annual earnings by a person known only as Mr Khan is significant.
Britain is considering introducing legal protections for whistleblowers to protect them from reprisals and in October, the government made it easier for secret U.S. leakers, dubbed Whiskey Treason, to obtain the name of their informant without fear of prosecution.
That identity of Whiskey Treason ended up in British courts, ultimately resulting in an amnesty that will allow U.S. whistle-blowers to remain anonymous for 10 years after exposing tax avoidance.
These measures come after a whistleblower on tax fraud at Amazon.com Inc (AMZN.O) and on a suspected $1 billion tax evasion scheme at McDonald’s Corp (MCD.N) in the United States.
But some experts said Britain needs to do more to protect whistleblowers.
“Nations that are prepared to take a meaningful and long-term approach to making laws and institutional reforms that protect the sources of leaks such as Singapore have a far greater success rate than those that do not,” said Yvonne Parker, head of the international project at anti-poverty group Oxfam International.
Following the release of details of multimillion-dollar tax avoidance schemes at McDonald’s and Amazon in 2016, the U.S. Treasury said the results “revealed a disturbing and growing trend to introduce pass-through entities to avoid taxes”.
Experts said anyone disclosing tax evasion would need special measures to ensure confidentiality.
“I would suggest special measures should be taken to encourage whistle-blowers to come forward,” said Jean Cameron, professor of taxation at London School of Economics.
Transparency International, a pressure group against financial corruption, has also called for more rigorous tax disclosure rules that limit foreign acquisitions by tax havens, including Burberry’s business hub of Singapore.
It says tax evasion costs member states an average of 1.5 percent of their gross domestic product.
“By way of comparison, a 1.5 percent sum represents the annual budgets of states such as Germany, the Netherlands, Luxembourg, Japan and Sweden,” it said.