A report prepared by the OECD Task Force on Tax Crimes and Other Crimes entitled “Evading the net: tax crime in the fisheries sector” has been published by the OECD. The report points out that the fisheries sector is a very large global industry worth around USD 217.5 billion and with more than 500 million people in developing countries dependent on fishing and aquaculture for their livelihood. The sector is however the target of criminal activity by organized criminal groups involved in smuggling drugs as well as illegal migrants and other forms of people trafficking. Tax frauds are committed in the sector in respect of profits taxes, social security, value added tax and customs duties.

Certain aspects of the fisheries sector make it vulnerable to crime, such as the lack of transparency in the sector and the difficulty in establishing beneficial ownership as a result of the use of flags of convenience and the use of offshore companies.

The paper looks at the strategies that can be used by tax administrations to prevent and detect tax crimes.  Tax administrations can raise awareness of the problems, improve information gathering and improve cooperation between government agencies. The loss of tax revenue for developing countries is sufficiently large to have a negative effect on efforts to reduce poverty and to promote long term development.

The report concludes that tax administrations must review the vulnerability of their countries to tax crime in the fisheries sector and develop strategies to fight this crime.  The strategies should include a program of voluntary compliance in the sector; training of tax inspectors in the relevant skills and knowledge to detect tax crime in the sector; and improvement of detection through cooperation with partner agencies such as fisheries authorities, police, coastguards and the customs administration. On an international level tax administrations should cooperate by methods such as the exchange of information to fight tax crime and if necessary establish regional working groups. For example there is already a North Sea Fisheries Intelligence Group formed to exchange information and combat tax crime in the sector.