When you think about the Panama papers, what is the first thought that comes to mind? Was tax compliance one of them? The Panama Papers occurrence has surely been a wake-up call for governments and tax administrations as it sheds light on an even bigger denominator: Tax Compliance.

1. Written by Peter Grootens, RA –
Client Executive Relations
The importance of tax
compliance in light of the
Panama Papers

2. Rather than a tax scandal,
the Panama papers
occurrence sheds light on
a bigger topic
Tax compliance

3. Definition of compliance
Tax compliance is defined as “[the] degree to which a taxpayer
complies (or fails to comply) with the tax rules of his country, for
example by declaring income, filing a return, and paying the tax
due in a timely manner.” - OECD

4. Missed government
income
Effects of
non-compliance
No investment for
further development
Increased burden for
compliant tax payer
Budget deficits are a major
problem and cost a lot of effort
to fix.
Due to missed income, no
resources left to invest in areas
such as education, health care &
justice.
They could pay less if a larger
majority would be compliant.

5. “If you think (fixing)
tax compliance is expensive,
try non-compliance.”

6. Tax evasion costs governments
approximately $200 billion per
year.
Raising taxes and budget cuts
is not the answer. Increasing
compliance is!
Since compliance became a priority for
the UK government, so far 2 billion British
pounds have been tracked down from
offshore tax dodgers.

7. Compliance should be high on
the agenda of every government.
It is an important element of a
successful and vibrant economy
and the price to be paid for non-
compliance is high.
Conclusion

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