How much are tax evasion and fraud costing us? With the G8 Summit taking place in the UK for the first time since 2005 today and tomorrw, it’s a question that’s high on the world leaders’ agenda.
In fact ensuring better tax compliance is one of three goals set by UK Prime Minister David Cameron for the summit, alongside advancing trade and promoting greater transparency. Like all the G8 leaders, he is only too aware of the scale of the tax compliance challenge.
Mr Cameron’s determination to address this issue reflects a groundswell of public and political opinion against tax evasion and avoidance. Revelations of tax avoidance, sometimes referred to as ‘profit shifting’, on a massive scale by some of our biggest consumer brands – including Amazon, Starbucks, Arcadia Group, Boots and Vodafone – left a bitter taste in many taxpayers’ mouths.
So what’s the answer? A number of agencies we’ve worked with have identified predictive analytics as a way to spot mismatches between a taxpayer’s economic activity and his reported taxable income. So a taxpayer declaring an income of just €40,000, yet with lifestyle indicators suggesting he possesses properties abroad and a high-spec car, will be flagged before he cheats the system.
As I point out in an article that’s appearing in the G8 Summit event brochure, taking an intelligence-led analytics approach, really does get results.