Chasing the Tax Cheats
Globally billions, if not trillions, of dollars are lost to tax cheats every year. As a group of the world’s leading industrial nations, G20, meets in Pittsburgh this week Lesley Curwen examines what they intend to do to stop the cheating.
The leaders are putting their faith in international agreements called TIEAs, formal commitments made between two countries in which they promise to share tax information with each other. The idea is that, if enough countries sign up, it will stop tax evaders from slipping their money secretly from one country to the next.
Critics say that these TIEAs are laughably weak. Until very recently relatively few countries signed up to them; many countries signed up but then didn’t implement them; others deliberately don’t collect enough information to be able to offer a partner any meaningful information.
Plans are afoot to change all this, say defenders of the system. From next March serious sanctions will apply to countries which harbour tax cheats.
Yet critics believe the system could be strengthened still more if the political will was there to force change through. They say that the reason change is slow to come is that leading G20 countries themselves are making too much money out of tax evasion to really want to stop it.