The international community continues to make progress in the fight against tax fraud. This “in favor of the implementation of the new standards by the World Forum on Transparency and Exchange of Information for Tax Purposes which brings countries closer to the objective of eradicating bank secrecy for tax purposes”, specifies the OECD.
The 2019 assessment is positive. Almost 100 countries have exchanged information automatically. While allowing their tax administrations to obtain data on 84 million financial accounts held abroad by their residents. This represents assets with a total value of 10,000 billion euros.
These figures mark a significant increase compared to 2018, the first year of automatic exchange. And during which information on 47 million financial accounts had been exchanged, worth 5,000 billion euros. This situation is explained by the increase in the number of jurisdictions which have received information and by the widening of the field of information exchanged.
The role of the Common Reporting Standard is more than critical. It requires countries and jurisdictions to exchange information annually on financial accounts held by non-residents that they have obtained automatically from their financial institutions. This reduces the possibility of international tax fraud.
Many developing countries have joined the process and others are expected to follow suit in the coming years. “The automatic exchange of information changes the rules of the game,” said OECD Secretary General Angel Gurría on the eve of a plenary meeting of the OECD-G20 BEPS Inclusive Framework.
“This multilateral trading system created by the OECD and piloted by the World Forum now provides countries around the world, including many developing countries, with a wealth of new information through which their tax administrations can ensure that accounts abroad are duly declared ”, according to Angel Gurría.
“The countries will be able to mobilize much more revenue. This is particularly important in light of the current Covid-19 crisis. While approaching a world where fraudsters can no longer hide, ”he says.
Overall decrease in bank deposits
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An OECD study from November 2019 reveals that increased information sharing under the auspices of the Global Forum is associated with an overall decrease in bank deposits held by foreign entities in international financial centers by 24% (410 billions of dollars) between 2008 and 2019. Voluntary reporting programs, international tax inquiries and similar initiatives undertaken before the start of automatic exchange in 2017 and since then have already identified more than 100 billion euros of additional global tax revenue.
Tax transparency: Where is Morocco at?
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African countries have made progress in reaffirming their commitments and building their capacity to achieve fiscal transparency. They have been instrumental in sharing information on illicit money flows, as indicated in the report on “Tax transparency in Africa 2020, Africa Initiative progress report for 2019”.
On the African continent, illicit financial flows are estimated to be between 50 and 80 billion dollars per year and 44% of the continent’s financial heritage is held abroad. This corresponds to losses in tax revenue of 17 billion euros. Morocco has been a member of the World Forum since 2011.
The implementation of the standard on tax transparency and the exchange of information on request (ERD) was judged to be “Mostly Compliant” during the first cycle of reviews in 2016. Technical assistance is provided for the implementation implementation of the enhanced on-demand information sharing standard, including the availability of beneficial owner information.
And this, in view of the second cycle of reviews of this exchange, which should be launched in the third quarter of 2020. The information exchange infrastructure is in place (delegation of the function of competent authority, RE unit and tools).
The Multilateral Convention has been in force since September 2019. Thus, the implementation of an information exchange strategy is underway. The standard for the automatic exchange of information on financial accounts is being implemented as part of a pilot project with France, the first exchanges of which are scheduled for 2021.
The report is published by the Africa Initiative (IA) of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the African Union and the Forum on Tax Administration in Africa (ATAF), in partnership close with the African Development Bank.
F.Z. T.
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