Confronting Tax Evasion and Other Illicit Financial Flows

Confronting Tax Evasion and Other Illicit Financial Flows


by shayden

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Denmark’s minister of taxation, Karsten Lauritzen, told an audience at this year’s International Anti-Corruption Conference that he writes an annual letter to the country’s top 20 tax-paying corporations.

“Thanks for contributing to Danish society,” it reads.

He was speaking at a panel titled ‘Confronting Tax Evasion and Other Illicit Financial Flows – Time to Translate Commitments into Action’.

Before sharing this, Lauritzen quipped that he wished the phrase “nothing in life is certain but death and taxes” was true. “It would certainly make my job easier, but actually death is the only certain thing,” he said.

Over two hours, Lauritzen, Ghana’s deputy minister of finance Kwaku Kwarteng, and Jonathan Larsen, the deputy director of IRS Criminal Investigation in the United States, spoke about the problems around tax evasion and reasons why an individual might not pay tax.

Lauritzen said people need to believe that tax is going toward important public services, rather than going into the wrong pockets. “As a human being I understand that,” he said.

Corruption undermines trust in a government and willingness to pay tax, Lauritzen said, adding that transparency “is a game-changer.”

Some estimate the total amount of tax evasion is 5% of GDP – though the real amount is unknown due to the fact that the very nature of evasion is that it’s a hidden crime.

Culture also plays a role, believes Kwarteng. “Traditionally in our society disclosure of assets and personal wealth is a very private matter, and if people knew how much you were worth it could open you up to all sorts of hassle.” He said that they recently set up the office of the special prosecutor to deal with corruption in Ghana.

Meanwhile, Larsen was asked about working under U.S. president Donald Trump, whom critics have accused of tax evasion and lack of transparency in his own business dealings. Larsen would not be drawn on it. “As a government employee we have a very strict set of ethical rules and we don’t get involved in politics…we do that regardless of who it is, what political party it is.”