Financial crime, corruption and tax evasion: a cross-country investigation

Abstract

Purpose

This paper aims to examine the relationship between the financial crime and tax evasion and tests whether corruption moderates such a relationship.

Design/methodology/approach

Tax evasion measure is based on Schneider et al. (2010). Financial crime is collected from Basel anti-money laundering (AML) report.

Findings

Using a sample of 120 countries, the authors find that the level of financial crime is positively associated with tax evasion. When testing for the moderating effect of corruption, they document that the positive relationship between financial crime and tax evasion is more pronounced for high corrupt environments.

Originality/value

The findings have policy implications for governments aiming to combat tax evasion and financial crimes.

Citation

Amara, I. and Khlif, H. (2018), "Financial crime, corruption and tax evasion: a cross-country investigation", Journal of Money Laundering Control, Vol. 21 No. 4, pp. 545-554. https://doi.org/10.1108/JMLC-10-2017-0059