Tax, Crime & Covid-19

Illicit financial flows (IFFs) are known to have a negative effect on political and economic interests of countries, as they undermine the sustainability of public finances and cause wider threats to national security. To address this issue, revenue authorities have a key role to play in identifying and reporting suspected tax and other financial crimes, but they also face significant barriers. In this context, collaboration between revenue administrations has become a central piece in tackling the problem by enabling to maximise reporting and information sharing.

The first webinar of the “Tax & Crime” series took place on 14 October 2020. NTO members, guest speakers from the Kenyan and Finnish revenue authorities and participants discussed the impact of IFFs on tax administration activities, strategies and preventive measures against tax evasion and financial crimes. The webinar aimed to gather input from revenue administrations on the impact of IFFs and gaps remaining in the policy and institutional efforts to fight IFFs, allowing NTO members to identify how further national and international cooperation could help to tackle IFFs more effectively.

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While tax administrations play a key role in identifying and reporting suspected tax and other related financial crimes, significant barriers to the effectiveness of their actions remain. In particular, the lack of access to strategic information and clear communication channels between different national and international authorities present major obstacles. By exploiting countries’ legal and institutional weaknesses, and taking advantage of technological developments, criminals can covertly move substantial sums between multiple jurisdictions, allowing criminal activities and IFFs to become increasingly sophisticated. In this context, the collaboration between revenue administrations and effective exchange of information is crucial to identify unusual transactions and common gaps, as well as to exchange legal instruments and best practices to tackle these.

The second webinar of the “Tax & Crime” series took place on 4 February 2021. Guest speakers from the Iranian and Brazilian revenue authorities together with over 100 participants from 70 different tax administrations worldwide discussed objectives and bottlenecks addressed by revenue authorities to promote better cooperation between national and international agencies as well as timely and effective responses in the fight against tax crimes. The webinar helped to better understand how identified challenges can be overcome and consider the scope for regional and international tax organisations to contribute to this endeavour.

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In face to the Covid-19 pandemic and despite the differences in tax systems, countries worldwide faced a common challenge: to adopt reliable and appropriate communication channels and provide insightful information in uncertain times. As governments take on tax policy and administrative measures to address the Covid-19 crisis and its economic consequences, adjusting processes and enhancing communication strategies and tools to ensure that taxpayers are well informed have become even more relevant than before.

The NTO hosted the first webinar of the “Tax & Covid-19” webinar series on Thursday 29 April 2021, where representatives from the tax authorities of Mali, the United Kingdom and Canada shared their approaches on communication strategies and citizens´ service during the pandemic. Exchanging lessons learned and approaches in such a webinar format helped foster collaboration and was part of this new digital communication method. Therefore, digital peer-learning will remain a central approach in the NTO´s capacity building objectives.

For more information on the 1st Webinar of Tax&Covid, click here.

Tax compliance is the ability and willingness of taxpayers to comply with tax legislation during the auditing process and is a crucial pillar of ensuring Domestic Revenue Mobilisation (DRM). Hence, identifying the common patterns of tax non-compliance and finding ways to reduce them is pivotal in any Tax Administration. As the current Covid-19 pandemic has affected the tax administrations´ approach to interact with citizens, a new challenge of generating trust and increasing tax compliance during the process of digitalisation has rapidly emerged.

As the second webinar of this series, the NTO brought together on Wednesday 9 June 2021 tax representatives from Hungary, India and Cameroon and over 140 participants from over 40 countries to discuss new innovative methods and approaches to enhance the taxpayer´s experience and maximise tax compliance during these unprecedented times. As one of the main takeaways, the speakers highlighted the essential role that Information Technology (IT) plays in order to ensure fair and efficient tax systems, especially during the accelerated digital transition.

For more information on the 2nd Webinar of Tax&Covid, click here