There are significant losses in tax revenues across the European Union (EU). National governments lose billions of euros in the revenues from non-paid taxes and other illegal activities. The fight against aggressive tax planning, tax fraud and illegal activities is on the agenda of the EU, OECD and all the national governments. However, due to the size of tax losses it should not be treated just as tax evasion, but rather as tax terrorism! Therefore, the author has set criteria when tax evasion should be named as “tax terrorism” as well as designed the principles for tackling tax terrorism and other ways of non-payment of taxes. The tax evasion could be treated as “tax terrorism” in case of international evasion from taxes by organized groups of persons for criminal purposes as well as when it creates significant losses in government revenues. The term “tax terrorism” would have impact to communication and cause response of society and politics, therefore it would have more social and political consequences.
If the inline PDF is not rendering correctly, you can download the PDF file here.
Alm, J., Martinez-Vazquez, J., & McClellan, C. (2016). Corruption and firm tax evasion. Journal of Economic Behavior & Organization, 124, 146-163. https://doi.org/10.1016/j.jebo.2015.10.006
Blackbourn, J., & Walker, C. (2016). Interdiction and indoctrination: The counter-terrorism and security act 2015. Modern Law Review, 79(5), 840-870. https://doi.org/10.1111/1468-2230.12217
Blackburn, K., Bose, N., & Capasso, S. (2012). Tax evasion, the underground economy and financial development. Journal of Economic Behavior & Organization, 83(2), 243-253. https://doi.org/10.1016/j.jebo.2012.05.019
Blaufus, K., Hundsdoerfer, J., Jacob, M., & Sünwoldt, M. (2016). Does legality matter? The case of tax avoidance and evasion. Journal of Economic Behavior & Organization, 127, 182-206. https://doi.org/10.1016/j.jebo.2016.04.002
Bruce, G. (2013). Definition of Terrorism Social and Political Effects. Journal of Military & Veterans' Health, 21(2), 26-30.
Burton, D. R. (2002). Towards a Global Tax Cartel? Policy, 18(4), 9-11.
CATA. (2006). Tax Evasion and Avoidance: Strategies and Initiatives for Tax Administrators. Commonwealth Association of Tax Administrators. 128 p.
Council of the European Union. (2016). Recommendation for a council recommendation on the 2016 national reform programme of Latvia and delivering a Council opinion on the 2016 stability programme of Latvia. 9131/16 ECOFIN 422 UEM 172 SOC 286 EMPL 182 COMPET 259 ENV 303 EDUC 159 RECH 151 ENER 164 JAI 409 -COM (2016) 334 final. Brussels, June 13, 2016.
European Commission. (2016). Communication from the commission to the European parliament, the council and the European economic and social committee on an action plan on VAT. Towards a single EU VAT area -Time to decide. Brussels, 7.4.2016. COM (2016) 148 final.
Eurostat. (2016). Tax revenue statistics. European Commission.
Ministry of Finance. (2016). Action plan to limit the shadow economy 2016 -2020. Retrieved from http://fm.gov.lv/files/tausaimnieciba/nuekonomika/EEIP_2016_2020_16062016.pdf
Grozdanova, R. (2014). “Terrorism” - Too Elusive a Term for an International Legal Definition? Netherlands International Law Review, 61(03), 305-334. https://doi.org/10.1017/S0165070X14001351
Joppe, A. & Sproǵe, I. (2016). Global Tax Competition in Off-Shore Companies. Economic Science for Rural Development Conference Proceedings, 43, 257-265.
KPMG. (2015). Project SUN. A study of the illicit cigarette market in the European Union.
Litina, A., & Palivos, T. (2016). Corruption, tax evasion and social values. Journal of Economic Behavior & Organization, 124, 164-177. https://doi.org/10.1016/j.jebo.2015.09.017
Mullineux, J. (2014). The Distinction Between Tax Avoidance and Tax Evasion. New Zealand Universities Law Review, 26(2), 273-296.
OECD. (2015). Base Erosion and Profit Shifting Project. 2015 Final Reports. Information Brief.
Omar, N., & Zolkaflil, S. (2015). Profit Shifting and Earnings Management through Tax Haven Subsidiaries: An Exploratory Analysis of Multinational Companies. Procedia Economics and Finance, 28, 53-58. https://doi.org/10.1016/s2212-5671(15)01081-3
Pappa, E., Sajedi, R., & Vella, E. (2015). Fiscal consolidation with tax evasion and corruption. Journal of International Economics, 96, S56-S75. https://doi.org/10.1016/j.jinteco.2014.12.004
Popa, G. D. (2013). Tax havens and the terrorism. Analele Universitatii Maritime Constanta, 14(20), 275-279.
Reitan, E. (2010). Defining Terrorism for Public Policy Purposes: The Group-Target Definition. Journal of Moral Philosophy, 7(2), 253-278. https://doi.org/10.1163/174552409X12574076813513
Saleem, M., & Tahir, M. A. (2014). On Defining Terrorism: Text And Context - A Qualitative Approach. The Dialogue (1819-6462), 9(1), 27-38.
Schwarz, P. (2011). Money launderers and tax havens: Two sides of the same coin? International Review of Law and Economics, 31(1), 37-47. https://doi.org/10.1016/j.irle.2010.12.001
Sinnasamy, P., Bidin, Z., & Ismail, S. S. S. (2015). A Proposed Model of Non-compliance Behaviour on Excise Duty: A Moderating Effects of Tax Agents. Procedia - Social and Behavioral Sciences, 211, 299-305. https://doi.org/10.1016/j.sbspro.2015.11.038
Sorel, J.-M. (2003). Some Questions About the Definition of Terrorism and the Fight Against Its Financing. European Journal of International Law, 14(2), 365-378. https://doi.org/10.1093/ejil/14.2.365
SRS. (2016). Corporate Income Tax in Latvia.
TAXUD. (2014). Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the EU Strategy and Action Plan for customs risk management: Tackling risks, strengthening supply chain security and facilitating trade; COM (2014) 527 of 21st August 2014, endorsed by Council in December 2014.
TAXUD. (2016). Study and Reports on the VAT Gap in the EU -28 Member States: 2016 Final Report. TAXUD/2015/CC/131.
Vasile, E. & Croitoru, I. (2015). Theoretical Considerations on Tax Evasion. Valahian Journal of Economic Studies, 6(3), 49-55.
Wu, T. C. M. (2016). Profit Tax Evasion under Wage Bargaining Structure. The B.E. Journal of Theoretical Economics, 16(2), 817-834. https://doi.org/10.1515/bejte-2014-0090