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German rich and famous in taxman's crosshairs

AFP · 9 Feb 2014, 09:48

Published: 09 Feb 2014 09:48 GMT+01:00

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A football legend, a feminist icon and several politicians have issued rueful apologies recently for stashing away their wealth abroad, out of sight of the authorities.

Amid the spate of cases, the public perception of tax-dodging is shifting from that of a naughty but common misdemeanour to a crime and a moral assault on fair burden sharing in society.

Perhaps the highest-profile case has been that of Bayern Munich football club president Uli Hoeneß, 62, who faces trial on March 10th for having hidden millions of euros in Switzerland.

Days ago Alice Schwarzer, a feminist activist, anti-prostitution campaigner and TV talk-show regular, also confessed to having kept a secret account in the neighbouring tax haven, forcing her to pay back-taxes worth €200,000 ($270,000).

"Yes, I had an account in Switzerland," the 71-year-old confessed. "Last year I reported it to the fiscal authorities, I paid taxes on the interest and closed the account."

Berlin mayor Klaus Wowereit, already under fire for overseeing a bungled airport project, also faced new calls to quit this week after keeping silent about the shady tax affairs of his culture secretary.

The secretary, Andre Schmitz, resigned after he admitted to parking more than €400,000 in inheritance money in Switzerland without paying taxes due on it in Germany.

The latest political scalp that was claimed by a foreign bank account -- this one in the Bahamas -- was that of the treasurer of the conservative party of Chancellor Angela Merkel.

Helmut Linssen, 71, said he would step down "in the interests of my party and my family", although he denied any wrong-doing and said an investigation had long been wrapped up.

German tax investigators started a major crackdown in 2010 when they got their hands on data CDs with lists of bank account holders in foreign tax havens such as Switzerland.

The threat of dawn raids compelled many German tax cheats to come forward and report their accounts abroad, pay back taxes on the interest earned plus a fine, so they could once more sleep soundly at night.

The CDs surfaced at a time when the EU and United States are stepping up pressure against cross-border tax evasion, forcing many tax dodgers to face the fact that the days of secret offshore accounts are numbered.

Last year more than 26,000 Germans turned themselves in. In all the German government has made an additional €3.5 billion euros ($4.75 billion) from such back payments and fines since 2010.

Now a debate has broken out within Germany's left-right coalition government over whether tax-dodgers should indeed be allowed to get off almost scot-free, or whether they should face harsher penalties.

The centre-left Social Democratic Party (SPD) has suggested that the effective amnesty for people who come forward should be scrapped for all but the most trifling amounts.

"I understand that finance ministers want the return of the money, but we must also be concerned about justice in this country," said Thomas Oppermann, the SPD's parliamentary leader.

Right now the law allows that "we evade taxes as long as it all goes well, and when it doesn't, we just self-report," he added.

The SPD financial expert Joachim Poss told Bild daily that "the amnesty for voluntary disclosure by tax evaders should be scrapped because it grants a privilege to tax evasion relative to other offences".

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Merkel's conservatives are against this plan, arguing that allowing people to come clean without fear of penalty remains the most pragmatic way for the state to get its money back.

Finance Minister Wolfgang Schäuble said this week: "I don't see compelling reasons for the abolition of the instrument."

In the broader tax debate, "the yardsticks are shifting," wrote columnist Jan Fleischhauer for news portal Spiegel Online.

"It used to be that a politician stumbled over an extramarital affair, today it is over an improperly registered account."

READ MORE: Tax evasion 'OK for Joe Normal' say Germans

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