A global body is to be set up to monitor tax invasion. The body which is expected to come into operation by January 25, 1988 will comprise of the world‚Äôs main industrialised nations.
This fact is contained in the Business and Economic Report of First Bank of Nigeria Limited for the month of October just released.
According to the report, nations are becoming increasingly worried over the ugly situation of tax evasion and avoidance.
A substantial amount of government revenue is derived from this source taxation.
Tax avoidance according to the report is a deliberate effort by tax payers to manipulate the loopholes n the tax law to reduce their tax liabilities.
The escalating rate of tax avoidance and evasion has aroused the interest of some industralised nations to enter into multilateral cooperation to check tax evasion and avoidance.
The cooperation will be between tax authorities of the different nations.
One of such moves is the proposal by leading industrialised nations which accepted the proposal to improve cross-border cooperation between tax authorities to detect evasion and avoidance.
However, the move follows the decisions by the governing body f the Paris based Organisation for Economic Cooperation and Development.
The main objective of the body is to help tax authorities of different countries to exchange information necessary to check tax evasion.
Moreso, it will allow countries to make specific requests for information in cases where there is strong suspicion of tax evasion.
However, countries like Switzerland, West Germany, Ireland, Luxembourg and Portugal have expressed their fears over the scheme and are not likely to sign the convention.
One area of fear is the likelyhood of America Internal Revenue Services extending its power over multi-national corporations.