The Economic and Financial Committee (EFC)
The question of fighting tax avoidance and tax evasion by both, private citizens and corporations, to gain transparency and justice among different tax systems
Tax avoidance and tax evasion are very common ways for companies and private citizens to economize money. Whereas the first measure, minimizing taxes under the International Revenue Code, is legal by e.g. sheltering income from taxes by setting up employee plans or locating money in an offshore jurisdiction. Tax evasion can be an act of crime depending on the nations’ tax system, since it is described as an act of not paying taxes owed, not reporting income or giving an account of expenses not legally allowed.
Transparency has been shown to be the main tool to prevent and detect these actions, partly because social and political pressure are great ways to change the taxpayers' behavior and awareness of the problem as seen e.g. in the Paradise Papers in 2016. Estimated numbers of the United Nations Organizations show that up to 240 billion revenue loss was the cause of tax evasion, as well as tax avoidance, in 2015 alone.
An UN Code of Conduct on Cooperation in Combating International Tax Evasion has been approved in 2016 which advocates an exchange of information among different countries including developing countries in order to antagonize against the legal acts and assure justice in the different countries’ tax systems. However, to eliminate both, tax evasion and tax avoidance, a considerable increase in financial transparency and accountability is required.