The world could lose up to R27 trillion in counterfeiting and piracy
10 November 2015
“Criminal activities such as corruption and tax evasion make up 8% of world trade, according to UN Office on Drugs and Crime.” (Source: World Economic Forum).
Widespread corruption and the financial losses due to tax evasion have led governments to consider the benefits of putting more stringent tax collection methods into place. No longer will governments be able to be complacent with that percentage. Now that new Sustainable Development Goals (SDGs) have been decided upon, it is important that governments do everything they can to collect as much revenue as possible, if they want to achieve these Goals by 2030.
“Another WEF report estimates the value of the ’shadow economy’ at R8.877trn, a figure that rises to R27.31trn when money laundering is included.”
It is the responsibility of the governments to ensure that they are collecting the correct amounts in tax revenue. As this proves to be a challenge, they need to rethink their tax collection methods to ensure that better systems and processes are in place. Companies such as Avatar Technologies can assist governments in optimizing tax collection to improve their tax revenue.
The illicit economy is formed from the proceeds of illicit trade which is, in turn, largely rooted in organised crime, explained the WEF’s Jean-Luc Vez: “Whether it is human trafficking, arms trafficking, the illegal wildlife trade, counterfeiting or money laundering, these activities are incredibly lucrative and fuel the magnitude of the illicit economy.”