The UN has announced the launch of the High-level Panel on International Financial Accountability, Transparency and Integrity (FACTI) to find ways to curb illicit financial flows (IFFs) and recover lost corporate income tax revenue.
The initiative aims to narrow the financing gap as called for in the Sustainable Development Goals (SDGs).
Massive economic cost
According to the UN, corporate profit-shifting is collectively costing governments between US$500 billion and US$600 billion a year in lost corporate income tax revenue.
Additionally, it says US$7 trillion of private wealth is hidden in offshore tax havens and some estimates suggest the equivalent of 10 per cent of world GDP is held in offshore financial assets.
Globally, the UN says corruption is significantly draining budgets in developed as well as less-developed countries.
Recognising that it knows where there are many gaps, loopholes and vulnerabilities, the UN says new cases are emerging every day detailing the pilfering of resources, money laundering, tax evasion, bribery and other financial crimes.
“If these activities continue, least developed countries will be unable to deliver adequate health care and education to their populations and fail to achieve our collective Sustainable Development Goals”, said Ibrahim Mayaki, co-chair of the panel and former prime minister of Niger at the launch of FACTI.
“The systems that governments use to address different types of financial corruption are fraying and do not yet effectively deal with the new ways that are used to game the system,” he added.
The 15-member panel, with representatives from civil society, politics, academia and the private sector, will produce an interim report in July 2020, and its final report with recommendations in January 2021.
Categories: Trade Based Financial crimes News