NTO hosts the first webinar of the “Tax & Crime” series on Illicit Financial Flows

Counting on a large audience of representatives of revenue authorities from all over the world, the first of three webinars of the “Tax & Crime” series by the Network of Tax Organisations (NTO) took place on 14 October 2020. NTO members, guest speakers from the Kenyan and Finnish revenue authorities and participants discussed the impact of Illicit Financial Flows (IFFs) on tax administration activities, strategies and preventive measures against tax evasion and financial crimes.

“IFFs: Impact on tax administrations and best practices” was chosen as the topic for the first webinar, laying down the foundations for the 1st NTO Technical Conference on Tax & Crime in Rome in October 2021. This topic of global concern attracted more than 180 participants from over 80 different tax administrations worldwide to the high-level discussion.

The real fight against illicit activities lies in identifying the lacking information, rather than using the resources that already exist, Marcio Ferreira Verdi, Head of NTO Council said in his opening remarks. “Selecting taxpayers for audit is not the fight against tax and crime – there is a need to identify the data that is hidden. International collaboration and exchange of information are also crucial in the process.” 

Marcio Verdi also brought forward the NTO’s mission to serve as a global platform for the exchange of experiences, knowledge, and best practices on tax administration matters among regional and international organizations. By fostering a global dialogue and providing support and knowledge sharing opportunities to the members of partner tax organizations on efficient tools for fighting tax crimes, the NTO has an important role to play in the response to IFFs.

The ground-setting notion of “liquid crime requiring a multidisciplinary approach and interagency dialogue at the highest level” was then introduced by Stefano Gesuelli, Guardia di Finanza Attaché in Panamá, head of the Italian Mission and Director for planning at Inter-American centre of Tax Administrations (CIAT). Stefano Gesuelli pointed out the increasing linkages between the global economy and crime, such as illicit trade of legal products or the use of established banking, trade and communications networks to move illicit goods. He highlighted the importance of inter-agencies cooperation, international cooperation and investigative methodologies to respond to this context. 

Dr. Tera Saidimu Leseeto, Commissioner for Intelligence and Strategic Operations (ISO) at the Kenyan Revenue Authority spoke about strategies to identify IFFs, the role of informers, data analytics and joint investigations to flag tax evasion. Dr. Saidimu also discussed some of the enablers of IFFs, their impact on tax authorities and presented a case study on a trader scheme. Kenyan response strategies such as mechanisms for global information exchange, domestic collaboration of law enforcement agencies and the implementation of a whistle-blower channel were perceived with big interest and appreciation from the audience.

Tarja Valsi, Head of Compliance Control at the Finnish Tax Administration followed up presenting the “Finnish Strategy and Action Plan for Tackling the Grey Economy andEconomic Crime 2020-2023”. The new program includes new accounting obligations for companies, new means to intervene in intentional or grossly negligent underpayment, and additional resources for investigation and information sharing. Tarja Valsi concluded by providing a concrete example of the “Case Archipelago/Real Estate”, which illustrated the strategies adopted to identify and respond to unusual financing and money flows and conduct the tax audit in practice.

The session ended with an insightful panel discussion with questions from the audience and closing remarks by Marcio Verdi, who invited everyone to continue participating in the preparatory discussions for the 1st NTO Technical Conference on Tax & Crime. The Secretariat of the NTO thanks the speakers and guests for their contribution, and particularly IOTA Secretariat for providing the technical support for the event. The next webinar is expected to take place in February 2021, focusing on inter-agency collaboration, combatting tax crimes and exchange of information.