Ecuadorians approve ban on public officials holding assets in foreign ‘tax havens’

While public attention has been riveted to the presidential race since Sunday, voting results also show that Ecuadorians have overwhelmingly approved a referendum to bar politicians and civil servants from having assets, companies or capital in tax havens.

Foreign Minister Guillaurme Long

With almost all votes counted, some 55 percent of the people voted ‘Yes’ and 45 percent said ‘No’ on Sunday 19 February, according to preliminary results provided by the National Electoral Council of Ecuador. It is the first referendum of this kind in the world.

“It’s a very ambitious, radical, and exemplary referendum,” said Ecuador’s Foreign Affairs Minister Guillaume Long said in an exclusive interview with New Internationalist. He explained that now “civil servants will have one year to bring all their assets back to Ecuador, and if they don’t comply with this within one year they will have to step down – including President and Vice-President. This will be enshrined in electoral law.”

He said the aims of the referendum were to increase transparency and increase tax revenue for development, while also cracking down on corruption and bringing down inequality.

“It doesn’t solve the whole tax haven issue; it affects public workers, civil servants – but it seeks to position the debate on the national agenda,” Mr Long added.

The left-wing government pushed for action on the issue of tax havens after the scandal of the Panama Papers. According to the country’s tax agency, from January 2014 to October 2016, $4.52 billion left Ecuador destined for tax havens.

Ecuador is also spearheading an initiative to create a UN body regulating tax havens and other predatory fiscal policies.

The referendum asked: “Do you agree that, in order to fulfill a dignity of popular election or to be a public servant, it is established as a prohibition to have assets or capital, of any nature, in tax havens?”

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Credit: New Internationalist, https://newint.org