1st June 2017
It’s clear to see that almost everywhere in the world it’s getting more and more challenging to get away with tax evasion. The introduction of the likes of the Criminal Finance Bill in this country have meant that the stakes are higher and authorities have considerably more information with which to make strategic inquiries into those they suspect could be trying to break tax law.
Almost every country around the world has contributed to the positivity, however recent reports suggest that one region may be feeling slightly less optimistic than the rest of the world.
According to a recent poll by data analytics firm, Fico, one in five banks in the Asia-Pacific region expect tax evasion in 2017 to increase 100 to 500% over last year’s levels. In addition, a further one in five senior fraud managers said they expect the increase to be up to double last year’s levels. Just 22% of respondents felt evasion would fall.
The reasons behind the predicted rise in illegal behaviour are hard to understand. New reporting regulations have been introduced this year to curb evasion and in five months’ time the Common Reporting Standard will begin to have an impact within the region.
As Dan McConaghy, president for Fico Asia-Pacific stated, “More than 100 jurisdictions have already signed up to the automatic exchange of information. […] Its introduction this year will see an initial wave of Asian countries start to share tax information on individuals from September.”
So what is causing the uncertainty amongst firms in the Asia-Pacific region?
It appears as if the root of the issue is that many banks don’t have the required resources or systems to facilitate the exchange of information required. Almost seven out of ten respondents said they do not have the solutions to identify and report the accounts of private persons to other jurisdictions meaning that many will be forced to invest in order to enhance their tax compliance methods. Without this, the otherwise well intentioned introduction of the Common Reporting Standard will be all for nothing.
While other regions around the world have joined the fight against tax evasion in all its forms, the Asia Pacific region appears to be behind the curve and has some way to go to reach the standards set in the American and European markets, for example.
However, it’s likely this will drive increased hiring of compliance specialists from these areas into Asia Pacific and while the market perhaps isn’t as rigorous as others, there are still numerous opportunities for agencies placing talent here to land themselves in a significant amount of hot water. If you want to speak about the situation in this key region then get in touch with the specialists before it’s too late.