Charities and tax abuse
Johanne Charbonneau Canada Revenue Agency
Charities have become the latest victims of abuse by tax fraudsters and money launderers. Can they be better protected?
F
or most people, charities are cherished organisations. The vast majority of them are not only genuine and authentic but make an important contribution to society, in areas such as health, social assistance and education. Such is their high standing that many governments give special recognition to the role the charity sector plays in building a stronger and fairer world. For instance, several countries provide tax relief to these organisations and their donors. But while the vast majority of charities are honest and legitimate, fake charities emerge from time to time. Even bone fide charity organisations can be targeted by
criminals to launder the proceeds of tax crimes and other financial offences. Why charities? There may be a range of different reasons for this. For a start, the fact they are charities may make them a “soft touch” for criminals, who see them as being above public suspicion, and perhaps not subject to the kind of tough accounting vigilance afforded to regular businesses. Yet some charities handle vast amounts of money and, just like major corporations, often have to move those finances across borders. As a result, the privileged status of a charitable organisation is too often wilfully abused, whether by taxpayers, by OECD Observer
No 273 June 2009
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Spotlight
CLEAN TAX AND TRANSPARENCY Charities
