WASHINGTON: Step aside, Doctors Without Borders. A new class of professionals is ignoring national frontiers to come to the aid of economically struggling nations.
A team called Tax Inspectors Without Borders will begin helping developing countries deal with the flood of income to low-tax jurisdictions once it’s established next week by the United Nations and the Organisation for Economic Cooperation and Development (OECD).
The idea: to boost local tax agencies’ efforts to ensure that multinational corporations pay what they owe to governments in regions such as Africa, which alone loses more than $50 billion a year to illicit financial flows, according to a UN report.
The UN and OECD, which represents rich nations, will draw up a list of several dozen tax inspectors from advanced countries who could be summoned to help local agencies understand what anomalies to look for and what documents they need. Of special concern are transfer-pricing cases involving assets moved among a corporation’s units in multiple countries.
It’s the sort of advice that netted authorities in Kenya more than $23 million in a single case, thanks to veteran tax inspector Lee Corrick.
Corrick, who works for the OECD, flew to the East African country in 2012 to give a workshop on advanced tax auditing. It wasn’t long before Kenyan tax officials told him about a major problem they were encountering.
They described a complicated arrangement involving a tea- auction license to a Kenyan unit of a multinational, letters of credit from a related British unit and supposedly unrelated buyers who purchased tea from both entities.
After Corrick advised them on what to look for, and held two more workshops, the tax authorities met with the company and sealed an agreement for the tens of millions of dollars in extra tax payments — among the largest adjustments ever by Kenya.
“It’s about the transfer of knowledge and skills,” says Corrick, who joined the 34-nation OECD after a career as a tax inspector in the UK and South Africa.
By arrangement with Washington Post-Bloomberg News Service
Published in Dawn, July 12th, 2015
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