On 30 November 2020 the OECD published a publication outlining the Tax Crime Investigation Maturity Model. The maturity model has been developed to help jurisdictions to assess their capability in relation to the investigation of tax crimes and to guide them on capacity building to improve their ability to detect tax crimes and increase tax compliance.

The maturity model is based on the OECD’s 2017 publication entitled Fighting Tax Crime: The Ten Global Principles. The model sets out a process involving four levels of maturity described as the emerging, progressing, established and aspirational levels. This charts the improvements of investigation and enforcement through a continuous process of improvement and implementation of the required principles.

The maturity model does not introduce any new global minimum standards for jurisdictions but is a voluntary framework for self-assessment. The maturity model is relevant to countries at all stages of development.

Objectives of tax crime investigations

The document notes that the objective of a tax crime investigation regime is to support domestic resource mobilisation by addressing the tax gap, countering illicit financial flows and improving voluntary compliance by maintaining the integrity of the tax system. By providing effective deterrence the model should increase voluntary tax compliance.

Defined outcomes

Certain defined outcomes have been identified from examining the experiences of various countries. These outcomes include improved taxpayer compliance involving a whole of government approach; improved enforcement; better detection and prevention of tax and other financial crimes; punishment of crimes by criminal sanctions and recovery of proceeds; and enhanced international cooperation in fighting crime.

The document argues that the extent to which countries can achieve these outcomes depends on the level of maturity and effectiveness of their arrangements for tax crime investigation.

Maturity levels

The document notes that the maturity model includes four levels. A jurisdiction is at the emerging level when it has developed some capacity to fight tax crime but this capacity is ad hoc and in need of improvement. A jurisdiction reaches the progressing level when some process reforms have begun but they are not yet systematically implemented.

The established level is reached when robust processes are in place, enabling a high level of capability in combatting tax crimes. This level has already been reached in many of the most advanced jurisdictions. At the aspirational level the processes have been optimised with a great improvement in ability to combat tax crimes, using of new innovative tools and technology.