Global attempts to harness corporate tax dollars could go too far, according to a leading bank executive.

Barry Shailer, who steps down as the Bank of Bermuda's chief compliance officer this week, said there was a growing push from both Europe and the US for monetary "transparency" for corporate tax dollars.

When asked if Bermuda had anything to fear from the increased scrutiny and regulations, Mr. Shailer said: "What we have to fear more than anything else is over-reaction. I am speaking specifically of actions taken in the US that could be overkill for the situation."

Mr. Shailer's comments followed the growing debate in the US, and to a lesser extent from the European Union, on corporations that move offshore for tax benefits.

There have in recent months been six bills before the US Congress with the aim of stopping American companies moving out of the US. The focus of that debate has been Bermuda following the announcement that a number of companies - including high-profile toolmaker Stanley Works coming to the Island to save $30 million a year in taxes - would move here.

Mr. Shailer continued: "The current administration in the US has publicly stated on several occasions that international tax competition is healthy and the recognition that not every jurisdiction in the world has the same taxation structure. Therefore it is everyone's right and particularly it is a corporate obligation to maximise your efficiency and that includes obviously tax efficiency.

"Bermuda has always maintained a tax regime that is based on consumption, not on income. That fits the way Bermuda works. It means that people who come to Bermuda and spend money here are contributing to our tax costs. That works very nicely for Bermuda.

"What we would not want therefore is pressure on Bermuda to say you have to introduce income tax and that it has to be at a certain level to compare with the United States or Europe or whatever.

"And the other thing is to avoid Bermuda being branded as what is known as a `harmful tax jurisdiction'," he said.

Mr. Shailer added: "We are not out there saying come to Bermuda because we have the best tax base.

"We want people to come to Bermuda for legitimate business practice and then the fact that there may be a lower tax regime here is certainly helpful but that must not be the driving force.

"That is why I have long maintained that Bermuda is not a tax haven. If we were a tax haven our business would be very short lived. Tax havens are in fact fast disappearing as they know the wave of regulations are driving them either out of business or they have to change their set up. One recognises that business that is here for purely tax reasons is not sustainable.

"Sooner or later those tax reasons are going to be taken away and Bermuda would lose that business. And that may be the situation that we are looking at here with these corporate inversions.

"If the whole motivation is purely tax then the US will simply change the tax laws as they probably need to do and those businesses may not stay. So that is not the type of business that is sustainable to long-term growth for Bermuda," Mr. Shailer said.

When asked if there was anything for Bermuda to gain from the recent trend of corporate companies moving their incorporations to the Island for tax reasons, Mr. Shailer said: "There are mixed views on the pay out for Bermuda. If you talk to the lawyers and accountants they will quietly tell you that there are useful fees. But again, long-term value to Bermuda is probably questionable."

But Mr. Shailer predicted that there would continue to be a push for tax legislation: "They want to be able to track down money that they think is leaking out of their tax system. And they are going to keep on pushing for that. And we have seen the intensity of that grow just since the September 11 activities in the US.

"New legislation in the USA, the Patriot Act, effectively enabled the US to get information from just about anywhere. This is not something that is going away," he said.