According to the World Bank Enterprise Surveys, some regions ranks top when firms are asked if a gift or informal payment is expected or requested during meetings with tax officials. Emerging economies have some of the highest prevalence of bribes given to tax officials. Inadequate legislation structures and weak judicial systems enable tax officials to solicit for bribes without fear of prosecution. Taxation in most of these countries are highly bureaucratic, and tax officials take advantage of this situation by offering write off the tax obligation in exchange for informal payments. The top-ranked regions include
East Asia And The Pacific
29.8% of firms in East Asia and the Pacific report being under pressure to give gifts to tax officials during meetings. The majority of the countries in the East Asia and the Pacific are developing countries and have attempted, through legislation, to reform the public sector. Corruption is however still prevalent especially when firms are dealing with tax officials. Sectors, where tax officials get the most bribes in East Asia and the Pacific, are land administration, construction, customs and government. Firms will more often than not give bribes to acquire construction permits, import licenses, and secure quicker tax services.
19.6% of firms in South Asia admit to feeling pressure to give gifts to tax officials during meetings. Taxation procedures in most of the countries in South Asia are bureaucratic and lengthy. Tax officials ask for bribes in exchange for getting ‘things done’ easier and faster. Due to weak enforcement of corruption legislation in these countries, high levels of informal payments to tax officials have been reported. Tax officials offer a reduction of a firm’s tax liabilities in exchange for regular informal payments.
18.1% of firms in Sub-Saharan Africa admit to feeling pressure to give gifts to tax officials during meetings. Countries in the Sub-Saharan are grappled with weak regulatory procedures enabling corruption in public administration to thrive. Corruption in these countries has been linked to a low economic growth, where tax officials view corruption as a method to gain more income. Bribing of tax officials is especially rampant in customs departments. Firms are inclined to give bribes to tax officials to get their goods cleared quickly for export or import. Most of these countries have bureaucratic taxation procedures and tax officials seem to take advantage of the situation. In exchange for quick processing of tax related issues, tax officials solicit for gifts and bribes.
Maghreb And The Middle East
17.3% of firms in Maghreb and the Middle East admit to feeling pressure to give gifts to tax officials during meetings. Some countries in these regions are characterized by inefficient government institutions which are breeding grounds for corrupt tax officials. Tax officials rank among the top most corrupt public officials in most of these countries. Tax officials expect informal payments in meetings so as to process firms’ tax liabilities in time. In some cases, a firm’s tax liabilities may even be reduced by tax officials in exchange for money. Firms are also inclined to give bribes to obtain permits such as import and export licenses, business registration and construction permits.
Prevalence Of Bribery In Other Regions
Other regions where firms are expected or requested to give bribes to tax officials are Central Asia (9.7%), Caribbean (5.9%), Latin America (5.8%), Central Europe, the Baltic States (2.7%), and Western Europe (2.5%). Most of the countries in these regions are characterized by low transparency in rendering public services. Weak legal structures and a corrupt police force and judicial system act as deterrence to prosecuting corrupt officials. Tax officials take advantage of the inefficient legal structures to solicit for bribes and informal payments.
Prevalence Of Bribery Of Tax Officials Around The World
|Rank||Region||Share of Firms Pressured to Give Gifts to Tax Officials|
|1||East Asia and the Pacific||29.8%|
|4||Maghreb and Middle East||17.3%|
|8||Central Europe and the Baltic States||2.7%|