The Ten Global Principles to combat tax crimes.pptx

paper "The 10 Global Principles to Combat Tax Crimes" focuses on the different segments of crimes in the taxation domain and the 10 Global Principles to Combat Such Tax Crimes. The existence of tax crimes has been around for decades and has been boosted due to digitalization and globalisation. Countries around the globe are facing an economic threat due to financial crimes. It not only reduces the tax collection and revenue of the government but also affects the developmental growth of the economy.

1. "The Ten Global Principles To Combat Tax Crime" TAX ADMINISTRATION & DISPUTE RESOLUTION -VAIBHAVI HEMANT BHAGAT ID NOS.: 23014445

2. INTRODUCTION

3. Overview of the Ten Global Principles Principles Description Principle 1 Ensure tax offenses are criminalized Principle 2 Devise an effective strategy for addressing tax crimes Principle 3 Have adequate investigative powers Principle 4 Have effective powers to freeze, seize, and confiscate assets Principle 5 Put in place an organizational structure with defined responsibilities Principle 6 Provide adequate resources for tax crime investigation Principle 7 Make tax crimes a predicate offense for money laundering Principle 8 Have an Effective Framework for Domestic Inter-agency Co-operation Principle 9 Ensure international co-operation mechanisms are available Principle 10 Protect suspects’ rights

4. Principle 1: Ensure tax offences are criminalised “Jurisdictions should have the legal framework in place to ensure that violations of tax law are included as a criminal offence, and that effective sanctions apply in practice.” Whatever the specific details of each jurisdiction’s particular legal framework, it will be most effective if: The law clearly defines the tax offences that are criminalized There is a clear definition of who can be held criminally liable, including third parties that help facilitate the offence and business entities A criminal sanction (penalty) applies if the offence is proven The law that criminalized tax offences is effectively enforced

5. Principle 2: Devise an effective strategy for addressing tax crimes Each jurisdiction should have a detailed strategy for addressing tax crimes that identifies: The objectives of the tax authority Risks of non-compliance with the tax law Resources available to address these risks Challenges for the tax authority in addressing risks and how these can be mitigated Operational plan for achieving objectives Performance review plan “In order to ensure the effectiveness of the law on tax crimes, jurisdictions should have a strategy for addressing tax crimes. The strategy should be regularly reviewed and monitored.”

6. Principle 3: Have adequate investigative powers “Jurisdictions must have appropriate investigative powers to successfully investigate tax crimes.” Jurisdictions must have appropriate investigative powers to successfully investigate tax crimes, including: Power to obtain third party documentary information Search powers/ Power to arrest a person Power to intercept mail and telecommunications Power to search and seize computer hardware, software, cell phones and digital media Power to interview Power to conduct covert surveillance/ Power to conduct undercover operations

7. Principle 4: Have effective powers to freeze, seize and confiscate assets Jurisdictions should have the ability to freeze, seize and confiscate assets: Freezing – temporarily suspending the rights over an asset (e.g. a bank account) Seizure – temporarily restraining an asset or putting it into the custody of the government (e.g. a vehicle) Confiscation (or ‘ asset forfeiture ’) – generally used after the final outcome of a case, to stop criminals from accessing assets obtained from a crime These methods help to disrupt criminal activity, prevent further criminal activity, and act as a deterrent measure in reducing the profitability of committing tax crimes.

8. Principle 5: Put in place an organizational structure with defined responsibilities A jurisdiction should have an organizational model with defined responsibilities for fighting tax crime and other  financial crime . Establishing a clear organizational model allows for efficient allocation of responsibilities, as well as greater transparency and accountability for the use of resources and deployment of strategies. “A Jurisdiction should have an organisational model with defined responsibilities for fighting tax crime and other financial crime.”

9. Principle 6: Provide Adequate Resources for Tax Crime Investigation “Tax crime investigation agencies should have adequate resources.” Tax crime investigation agencies should have adequate resources, including: Financial resources – having the required budget and funding to pay for the needs of the agency Human resources – having a sufficient number of staff with appropriate knowledge, expertise and skills to work on tax crime investigations Training/ Infrastructure resources/ Organizational resources Data and technology resources

10. Principle 7: Make tax crimes a predicate offence for money laundering Jurisdictions should designate tax crimes as one of the predicate offences for  money laundering . Predicate offences are crimes that produce funds or assets, which may then be laundered to obscure the illegal source. For example, the predicate offence of drug trafficking can generate revenue, and laundering this revenue can allow the trafficker to use the funds without creating suspicion of criminal activity. The implications of designating a crime as a predicate offence are that the offender can be charged with the offence of money laundering, as well as the predicate offence itself. This may allow authorities greater scope to secure a conviction and/or impose greater penalties. “Jurisdictions should designate tax crimes as one of the predicate offences for money laundering.”

11. Principle 8: Have an effective framework for domestic inter-agency co-operation “Jurisdictions should have an effective legal and administrative framework to facilitate collaboration between tax authorities and other domestic law enforcement and intelligence agencies.” Tax crime investigations can involve  a number of government agencies , each having unique strengths or information that can support another agency’s investigation of the crime. This makes co-operation amongst the relevant agencies very important and beneficial, and an effective legal and administrative framework should be in place to facilitate this. Forms of co-operation may include information sharing, joint investigation teams and inter-agency centers of intelligence.

12. Principle 9: Ensure international co-operation mechanisms are available “Tax crime investigation agencies must have access to criminal legal instruments and an adequate operational framework for effective international co-operation in the investigation and prosecution of tax crimes.” Tax crimes frequently have an international element, for example international money laundering.  As the powers of investigation agencies are limited by jurisdictional boundaries, international co-operation is essential for the effective investigation and prosecution of tax crimes. There should be a legal agreement setting out the terms and procedural requirements of this co-operation.

13. Principle 10: Protect suspects’ rights “Taxpayers suspected or accused of committing a tax crime must be able to rely on basic procedural and fundamental rights.” A person accused of committing a tax crime must be afforded basic fundamental rights, including: The right to be presumed innocent The right to be advised of one’s rights The right to be advised of what one is specifically accused of The right to access documents and case material The right to consult a lawyer The right to interpretation and translation

14. CONCLUSION In the fight against tax crimes, adherence to these 10 principles is paramount. They establish a comprehensive framework for addressing tax-related offenses, safeguarding government revenue, and maintaining the integrity of financial systems. These principles underscore the importance of legal clarity, cooperation among agencies and jurisdictions, and proactive measures to prevent, detect, and penalize tax crimes. Furthermore, they emphasize the necessity of equipping investigative agencies with essential powers, enhancing international collaboration, and promoting transparency in financial systems. Overall, these principles serve as a foundation for effective strategies to combat tax crimes and protect the fiscal interests of nations.

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