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Brown calls for world drive against tax havens

Stop tax dodging! Britain's Prime Minister Gordon Brown, who is looking for an international effort to combat abuse of tax havens.

Britain's Prime Minister Gordon Brown has called for an international drive against tax havens as part of a planned "global new deal" to tackle the international recession.

Mr. Brown is believed to have won the support of other world leaders for to try to thwart efforts by large firms to cut their tax bills by basing their corporate headquarters in offshore jurisdictions - a move that could impact Bermuda.

The deal could be done at a summit of world leaders in London on 2 April and form part of wider attempt to revive the global economy.

Speaking on Wednesday, Mr. Brown said the world leaders should act as one to supervise banks, including ending the practice of firms and financial institutions setting up registered offices in islands and small countries which offer lower tax rates than the countries in which they are based.

Mr. Brown said: "We want the whole of the world to take action. That will mean action against regulatory and tax havens in parts of the world which have escaped the regulatory attention they need."

He admitted that success depended on the "rest of the world agreeing with us that this action needs to be taken".

But he added: "I am more confident now - having talked to world leaders - that we are in a position to take further action on this matter."

President Barack Obama has been scathing over American companies paying tax offshore, which is believed to account for hundreds of billions of dollars lost to the US Treasury.

He said on the presidential campaign trail: "There is a building in the Cayman Islands that houses supposedly 12,000 US-based corporations. That's either the biggest building in the world, or the biggest tax scam in the world - and we know which one it is."

Mr. Brown declined to name the tax havens he had in mind, but there are several under British jurisdiction, including Bermuda. Jersey, Guernsey and Alderney in the Channel Islands, the Isle of Man, the Cayman Islands and the British Virgin Islands are all British territories.