Brazil Loosing Billions in Illicit Financial Flows
September 8, 2014 Taxation in Brazil
BRASILIA – Illicit financial flows are on the rise in Brazil, as the country loses more and more every capital year to trade mis-pricing and hidden wire transfers.
On September 8th the independent think-tank Global Financial Integrity issued a new report, showing that in the years between 1960 and 2012 Brazil has seen more than USD 400 billion dollars in illicit financial flows.
The size of the illicit financial flows coming out of Brazil has increased progressively with time, rising from an average of USD 310 million per year in the 1960s, to USD 14.7 billion over the first decade following the turn of the century, finally jumping up to more than USD 33 billion in the last three years of the study.
According to the experts of the Global Financial Integrity, approximately 92.7 percent of the illicit financial flows was a direct result of fraudulent over- and under-invoicing of trade transactions, while the remaining illicit flows came primarily from unrecorded wire transfers.
While announcing the release of the new report, the president of the GFI Raymond Baker said that illicit financial flows are a growing problem for the country, facilitating tax evasion and fueling the underground economy.
He went on to say that the government needs to immediately enact new measures to increase transparency domestic and international financial transactions, while building greater cooperation between governments to shut down illicit money flows.
Photo By: Lucas Incas