Publication: Offshore Data Leaks and Tax Enforcement in Developing Countries
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Date
2024-05-20
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2024-05-20
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The past decade has witnessed a rapid increase in data leaks from tax havens, spanning from the Luxembourg Leaks to revelations in the Panama and Pandora Papers. While these leaks often prompt political investigations into politicians with offshore accounts and calls from civil society for greater transparency in corporate ownership, they also serve as valuable resources for tax authorities investigating cross-border tax evasion and avoidance. To illustrate this point, this note analyzes three country cases—Ecuador, Honduras, and Senegal—where the authors closely collaborated with national tax administrations. It documents the distribution of offshore company formation across jurisdictions for shareholders and ultimate beneficial owners, as well as the relative prevalence of these countries in the overall dataset published by the International Consortium of Investigative Journalists (ICIJ) in its Offshore Leaks Database (OLD). Finally, policy recommendations are provided for enhancing personal income tax enforcement.
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“Bachas, Pierre; Collin, Matthew; Flores, Tatiana; Scot, Thiago; Lyu, Hao. 2024. Offshore Data Leaks and Tax Enforcement in Developing Countries. Equitable Growth, Finance & Institutions Notes. © World Bank. http://hdl.handle.net/10986/41569 License: CC BY-NC 3.0 IGO.”
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