Tax crime and related crimes can be complex, fast moving, and take place both within and across countries. These crimes are often intricately connected with other serious organised crimes, such as corruption, money laundering, terrorist financing, and human trafficking. Combatting these closely related crimes requires financial and tax transparency, robust legal and institutional frameworks, and effective co-operation between tax administrations and other law enforcement authorities both domestically and internationally.
Tax and crime
Tax crime, money laundering, and other financial crimes threaten the strategic, political, and economic interests of countries and undermine public trust in government and the financial system. If not tackled effectively, these crimes can have profound and long-lasting impacts. Combatting them requires strong international co-operation to trace and locate financial flows, assets and the location and identity of criminals.
Key messages
While illicit financial activities are a global concern, they are particularly damaging to developing countries. Revenue lost to tax and other financial crimes deprives countries and their citizens of valuable resources that could have otherwise been invested in sustainable development, for example, by improving healthcare, education, infrastructure, and other public services. Helping governments in developing countries to tackle this issue more effectively will not only bolster domestic resource mobilisation but also help to build trust and confidence in the fairness of the tax and judicial system and in government as a whole.
Context
A set of global principles for fighting the global problem of tax crime
While often viewed as distinct crimes, tax crime and other financial crimes are closely linked. Consequently, tax authorities must work in tandem with other law enforcement authorities, such as the police, prosecutors, anti-corruption authorities, financial intelligence authorities, and anti-money laundering authorities, and other specialised economic crimes authorities to effectively prevent, detect, enforce, and recover the proceeds of these crimes.
The 2022 Recommendation of the OECD Council on the Ten Global Principles for Fighting Tax Crime, originally published as a guidance document, is the first international standard focused specifically on fighting tax crime. It sets out ten essential principles covering the legal, institutional, and operational frameworks necessary for the efficient and effective prevention and enforcement of tax crimes, while respecting the rights of accused taxpayers.
A global approach to capacity building
The OECD supports capacity building for tackling tax crime and related crimes through two major donor- funded initiatives: the OECD International Academy for Tax and Financial Crime Investigation and the joint OECD-UNDP Tax Inspectors Without Borders programme for Criminal Investigation (TIWB-CI).
The Academy is a multilateral training programme with an international centre in Italy, and regional centres for Latin America (Argentina), Asia-Pacific (Japan) and Africa (Kenya). There are also two pilot Academy programmes underway for South Asia (India) and Francophone countries (virtual). To date, the Academy has delivered training to nearly 3,000 law enforcement authorities from close to 170 jurisdictions.
The TIWB-CI programme focuses on enhancing developing jurisdictions’ resolution of tax crime cases through targeted technical assistance as well as real-time support on complex investigations. TIWB-CI focuses on a ‘learning by doing’ approach, with criminal investigators receiving bespoke support from international experts.
