GENEVA, April 5, 2008 (AFP) - The tax evasion row surrounding Liechtenstein prompted the European Union to revise an anti-tax evasion directive, EU Finance Commissioner Laszlo Kovacs said in an interview published Saturday.

'The Liechtenstein case has given the impetus for the revision of the dossier... Many state members of the European Union have doubts about the efficacy of withholding tax on savings,' said Kovacs in an interview with Swiss newspaper Le Temps.

He urged EU member states as well as non-members such as Switzerland, Liechtenstein and Monaco to share information with tax authorities.

A EU directive on savings tax was put in place since July 2005 with the aim to discourage taxpayers from parking their cash in offshore accounts.

The directive is up for revision after three years, and Kovacs said an intermediate report will be published next month.

Currently, the savings tax directive requires EU states to share tax information on interest income that citizens earn on accounts in other member states.

But there is a special arrangement for Austria, Belgium and Luxembourg, which instead charge foreign account-holders a witholding tax. Liechtenstein and Switzerland are covered by similar treaties with the EU requiring a witholding tax.

'The general opinion among state members is that the system of withholding tax, linked to banking secrecy, is not equivalent to the complete exchange of information,' said Kovacs.

Kovacs said while only traditional bank deposits fall under the directive, he wants to include other forms of savings such as shares, investment funds and foundations.

The issue of tax evasion heated up this year after Germany in February launched a massive tax evasion probe using banking documents allegedly stolen from a Liechtenstein bank LGT by a former employee of the bank, Heinrich Kieber.

Germany has shared the information with other countries and as a result many, including Australia, Britain, Canada, France, Greece, Italy, New Zealand, Spain, Sweden and the United States, are investigating their own citizens.