Developing nations asked to join tax exchange

LONDON (Reuters) - The government said on Tuesday it had asked developing nations to swap information to crack down on tax avoidance, ahead of a financial crime conference on Wednesday.

Treasury minister Stephen Timms wrote to 16 countries, including Jamaica, Cameroon, South Africa and Vietnam with the aim of setting up a multilateral tax information exchange involving Britain by the end of the year.

Timms wants a response by the end of March.

The G20 group of major developed and emerging economies has pushed hard to eradicate tax avoidance and money laundering as part of reforms to strengthen the financial system in the wake of the credit crisis.

But concerns about pockets of risk beyond the realms of the G20 is leading to moves to involve more countries in the drive to clean up, and level out, the global tax system.

There are also fears that development in poorer parts of the world is being held back by tax evasion. Studies suggest that developing countries miss out on at least $50 billion (31.8 billion pounds) of lost revenue due to evaded tax.

"The discussions will be an important further step to ensuring developing countries have the ability to collect the tax they are owed," Timms said.

"For too long developing countries have been cheated out tax revenues by individuals and some companies -- we will not allow this to continue."

Rich nations are also concerned about losing out on tax take by companies juggling their accounts between nations with less stringent tax regimes than those in developed economies.

Timms will attend a conference in Jersey on Wednesday which will look at how developing nations can improve their tax take, reduce money laundering and improve their financial regulations.

(Reporting by Matt Falloon; Editing by Diane Craft)