A (rotting) rose by any other name

You’ve all heard me gripe about tax evasion – about how people seem to be able to perform all sorts of mental and financial gymnastics in order to convince themselves that it’s not really a crime, not like drug trafficking or bribery or any of the really mucky stuff.  It’s just people taking their legitimately earned/inherited/won money and choosing not to give a legally-mandated portion of it to their government – it’s not like they’ve sold babies or anything.  My view is that (a) you’ve chosen to be part of a community so you should pay your way, and (b) if you don’t contribute, everyone else has to pay a bit more to ensure that there are, for instance, police and social workers out there making sure that no-one else sells babies.  But maybe I’ve been going about it all wrong – maybe it’s simply a matter of terminology.

Last week the research organisation Global Financial Integrity (see, there’s a good use of vocabulary: who’s going to stand up and say they’re not in favour of integrity?) published a report called “Illicit Financial Flows from Developing Countries: 2004-2013”.  In this report, they reveal that developing and emerging economies lost US$7.8 trillion in illicit financial flows in that period, with illicit outflows increasing at an average rate of 6.5% per year – nearly twice as fast as global GDP.  And although the report focuses on “two main conduits of illicit financial flows from developing countries: a) the mis-invoicing of trade, and b) leakages from the balance of payments”, it makes the point throughout that one of the first casualties is the revenue authority.  Illicit flows cannot be taxed, while “fraudulent manipulation of the price, quantity, or quality of a good or service on an invoice allows criminals, corrupt government officials, and commercial tax evaders to shift vast amounts of money across international borders quickly, easily, and nearly always undetected”.

So if the word “evasion” does not shock, outrage and shame in the way it used to, perhaps we should start talking instead about “illicit flows” – certainly the GFI report is in no doubt about the impact of illicit flows on the populations of the source countries: “Curtailing even a small portion of these illicit flows would have a catalytic impact on a government’s ability to address the needs of its most vulnerable people.”

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5 Responses to A (rotting) rose by any other name

  1. erskinomics says:

    Please stick to tax evasion … it’s a crime.

  2. I prefer ‘tax theft’ because that is what it is!

    • Robert James Long says:

      I like that, though of course to many people who engage in tax theft thend to believe that “tax is theft”! Bu then these people never seem to appreciate that buliding a business on the backs of state investment in transport, security and educated workforce then refusing to pay anything toward it is a much bigger theft. I point this out to one charming fellow who then told me “But I inherited my money.”. SO much better.

      Oh well

      • Yes, people tend to forget all the infrastructure provided by a society underpinned by tax. I also hear people saying “The government should find more money for this…” and then not taking the next step and realising that this means tax – somehow people think that governments have “magic money” that comes from nowhere. (Some have printed it in the past, but you know what I mean!)
        Best wishes from Susan

    • Nice and simple, Rowan – I like it!
      Best wishes from Susan

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