Principle 6. Provide adequate resources for tax crime investigation
87. Whatever the organisational model, sufficient resources should be allocated to investigate and take enforcement action in respect of tax crimes. The level and type of resources will vary in accordance with the overall budgetary constraints and other budgetary priorities for the jurisdiction. In particular the type of resources needed may vary depending on the nature, scale and developmental stage of the economy. For example, it may be more urgent to build the legal and physical infrastructure before acquiring advanced analytical and technology tools.
88. Moreover, the allocation of resources to different functions within the agency responsible for conducting tax crime investigations will vary depending on other factors, such as the strategic priorities and the organisational structure.
89. Recognising these circumstances, the important resources for agencies fighting tax crimes are set out below.
90. This means having the budget and funding to pay for the needs of the agency. The average budget for surveyed jurisdictions for which data was available was as follows:
91. Most surveyed jurisdictions indicated that the allocation of their budget was not dependent on meeting defined performance measures, even where performance targets had been agreed. From the survey, having pre-defined performance targets was uncommon. A minority of responding jurisdictions noted that performance targets had been identified, which included a minimum number of concluded investigations, number or percentage of investigations leading to prosecution, surplus earning, target time to complete an investigation, and revenue collection target.
92. Some surveyed jurisdictions were able to estimate the return on investment from the tax crime investigation function, as follows.
In Georgia, for every Georgian lari invested on tax crime investigation, the investigation service collected GEL 1.88 in 2018 (88% return).
In Mexico, for every dollar spent in tax crime prosecutions in 2019, there was a return of USD 16 (1 600% return).
In Spain, in the years 2015 to 2019, for every euro spent in tax investigations, the tax agency collected EUR 11.51 (return of 1 151%).
Switzerland, at the federal level, estimates a return of investment in tax crime investigations of 20 times the total costs of its staff (2 000% return on staff costs).
93. This means having staff with the appropriate knowledge, expertise, training and skills. Human resources are likely to have a significant impact on the efficient use of financial resources. This includes having a sufficient number of staff working on tax crime investigations. Staff numbers in the area responsible for tax crime investigations in surveyed jurisdictions, where data was available, was as follows:
94. Having the necessary human resources also includes ensuring that staff have the appropriate skills and knowledge to conduct complex financial investigations. This includes two aspects: having staff with expertise in all relevant fields; and providing ongoing training on emerging risks, investigative tools and skills.
95. The need to ensure that the agency has the necessary expertise in all relevant fields reflects the fact that financial crime investigations demand specialist knowledge and know-how and that a range of specialist skills may be needed within an investigation. All financial investigators should have a certain basic level of financial knowledge and skills such as practical investigation techniques, case management and intelligence collection. In addition, more specialised financial investigators will be needed, such as accountants, asset recovery specialists, cyber experts and forensic experts.
96. Training should be continuous and available for all staff at every level of experience and should include areas such as legal knowledge, emerging risks, investigative techniques, interview techniques, using and leveraging technology solutions, management skills, and working in cross-agency and international investigations. Where possible, training should include practical training drawn from real-life cases, as well as incorporating joint training sessions with investigators, prosecutors, tax authorities and other relevant stakeholders to create greater awareness of the possibilities for inter-agency co-operation. Undertaking international training can also be beneficial in sharing different approaches and creating a network of professionals that can enhance international co-operation.
97. A range of physical tools are required to conduct tax crime investigations effectively, such as forensic tools, administrative equipment (including for enforcement actions), the ability to securely handle evidence, and effective communication platforms among other things.
98. Robust organisational and strategic resources are needed to conduct the work and use the resources efficiently, as well as a network of inter-agency relationships.
99. It is important that investigators have access to relevant data and intelligence, as well as the hardware and software to analyse it. In terms of the data and intelligence required, this should include access to tax and other revenue information, bank account information, real estate information and commercial and company information. In terms of the technology resources, this includes computers, IT systems, smartphones, and data storage systems as well as the analytical tools to establish links, patterns and risks amongst different sources of data (both structured and unstructured data). Increasingly, law enforcement agencies need to have the skills and tools to conduct investigations in response to the increasing digitalisation and globalisation of criminal activity. It is likely that information and data analytics will become even more important over time, and access to a wider range of digital information and analytical tools will be needed. The survey shows that responding jurisdictions have access to a number of databases. Note that not all such databases exist in each jurisdiction. The table below is intended to describe the current approaches taken by different jurisdictions, which depend on the organisational structure, availability and sensitivity of certain data, and without reaching a conclusion as to the effectiveness of such forms of access.