An international tax task force to help countries bolster their tax systems and fight financial crime will be set up within months.
Inspecteurs des impôts sans frontières (Tax Inspectors Without Borders) is a new initiative aimed at transferring tax expertise to developing countries set up by the Organisation of Economic Cooperation and Development.
“Countries helping each other is the only way to effectively fight global tax evasion and avoidance.”, said OECD Secretary-General, Angel Gurría. “The idea is quite simple. Tax Inspectors Without Borders will match ‘demand’ from developing countries wanting outside help with complex international tax audits with the ‘supply’, of international experts, drawn mainly from cadres of tax inspectors serving in other tax administrations. Joint teams will operate under the local leadership in each country, based on a learning by doing approach”.
Oupa Magashula, Commissioner General of the South Africa Revenue Service, which hosted the group’s first meeting, said: “The Tax and Development Task Force should now mobilise the best experts and make them available to developing countries and get the Tax Inspectors Without Borders secretariat in place so the work can begin in earnest from 2013”.
Fight against global financial crime
Meanwhile, tax investigators from 60 countries are meeting for the first time to draw up an action plan to fight global financial crime.
The task force intends to link the resources of governments, central banks, the international Monetary Fund , World Bank and the United Nations in a campaign aimed at stamping out tax fraud, corruption and money laundering.
The task force is meeting under the auspices of the OECD in Rome in a bid to stem the flow of criminal activity that is estimated as worth 3.6% of global GDP every year.
OECD Deputy Secretary-General Richard Boucher, said “The crisis has led to a loss of trust and confidence. In occupying Wall Street in New York, the Arab Spring, and demonstrations in a number of countries people complain that the system protects privilege and lacks transparency.
“Coherent, co-ordinated and effective action to fight corruption, money laundering, tax crimes and other illicit flows and to promote integrity and transparency is now crucial to restore citizens confidence.”
Recognising that not all countries have the investigative skills necessary for successful criminal tax investigations, the task force will also set up an international academy on criminal tax investigations.
Countries ripe for criminal exploitation
The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes has also finished reviews of tax matters in 11 countries. These in-depth reviews identify deficiencies and make recommendations on how to address these concerns.
The OECD disclosed Costa Rica and Guatemala have tax and legal ‘deficiencies’ that leave them open to exploitation for financial crime.
Barbados, Bermuda and Qatar were said to be progressing well with imposing tougher financial laws. The OECD has now completed inspections on the tax and legal structures of 70 countries.
