Tax got Al Capone. Could tax now be a way of beating corruption?

Tax got Al Capone. Could tax now be a way of beating corruption?

Anne-Lise Prigent, OECD Observer

Every year, bribes eat up an estimated 1 500 to 2 000 billion dollars, the equivalent of 2% of the global economy. And this is just a tiny fraction of the corruption that infects our world, feeding terrorism, climate change and the refugee crisis. Corruption undermines the public’s trust in government and markets, and holds back development. Corruption can even cost lives, as the likes of building and engineering standards are secretly bypassed to win contracts and line a few pockets, sometimes with tragic consequences.

No wonder the fight against corruption and bribery is built into the Sustainable Development Goals in Target 16-5. But the fight will not be won without co-operation and, as is highlight in this article, this sorely underused weapon could become very powerful if properly deployed.

Take the world’s tax inspectors. We have a veritable army at our disposal which is already strategically deployed in the field, in virtually every country in the world. Surely our tax inspectors could be trained to spot suspicious transactions. They could help stop corruption in its tracks, as they stopped Al Capone. For this to happen, we need more co-operation between anti-corruption and tax authorities.

How many of the international corruption cases linked to bribery between 1999 and 2017 were brought to light by tax authorities? Barely 1%. Yes, 1%!

There are investigators and prosecutors tracking down corruption cases. And then we have tax inspectors with access to a mine of financial information. But the two teams rarely co-operate, rarely join the dots.

Meanwhile, the bad guys don’t work in silos and business is booming.

Can we change this? Yes, we can if we want to. The OECD’s 2018 Global Anti-Corruption and Integrity Forum took a good hard look at the situation.

Read the article in the OECD Observer: Tackling corruption through taxation: The power of co-operation.

©OECD Insights April 2018

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