An OECD blog post on 9 February 2022 looked at the fight against tax evasion and financial crimes in the Latin America region and at lessons learned from initiatives of the OECD’s Task Force on Tax Crimes and Other Crimes (TFTC) and the Criminal Investigation programs of the joint OECD/UNDP initiative Tax Inspectors without Borders (TIWB).
Tax evasion is a serious issue in Latin America. Fifteen countries have signed the Punta del Este Declaration, undertaking to strengthen tax policy and administration; reduce illicit financial flows (IFFs); and adopt a whole-of-government approach to combating tax evasion and financial crime. The whole-of-government approach involves cooperation between different government agencies to detect and deter tax crimes. This combined approach from various government agencies is necessary in view of the complexity of crime networks. The main challenge is to implement the approach effectively.
The criminal investigation programmes of TIWB provide technical assistance to developing countries to facilitate learning by experience. A tax administration teams up with a partner administration to approach complex cases with the aim of learning from the experience of the partner administration in relation to tax crime. Through these programmes tax investigators can acquire essential skills, and practical reforms can be introduced to boost capacity.
Information-sharing between government agencies involved in areas related to tax evasion can step up the fight to combat tax crime. The OECD’s publication Ten Global Principles for Fighting Tax Crime points out that receiving information from other government agencies can reduce the duplication of work; speed up investigations; and reduce costs. This can result in a greater number of successful prosecutions and a greater chance of recovering the proceeds of crime.
The OECD’s TFTC has an Advisory Group for Capacity Building, chaired by representatives from Argentina’s Federal Tax Administration. The Advisory Group aims to support tax administrations in strengthening their own capacity by means of TFTC publications and courses. These include the OECD’s Ten Global Principles for Fighting Tax Crime and an e-learning course on the Tax Crime Investigation Maturity Model.
The Advisory Group for Capacity Building is also involved in the administration of the OECD Tax Crime Academies, which include the Tax Crime Academy for Latin America. The Academy was set up in 2018 and aims to provide capacity-building courses for tax crime investigators and other related law enforcement officials, including prosecutors, anti-money laundering and anti-corruption officials. Courses are held on conducting and managing financial investigations as well as targeted courses on specific types of tax and financial crimes such as those related to money laundering and value added tax (VAT) fraud.
The Latin American initiatives have shown that there is a need for further policy reforms and improved practices. Information-sharing must take place not only domestically between different government agencies working in tax crime but also internationally with other governments. The fight against tax crime remains a priority so governments can increase domestic resource mobilisation and fund sustainable development.
