A Critical Appraisal of Tax Evasion as Predicate Offence for Money Laundering

Abstract

Tax evasion and money laundering are two global problems that are  devastatingly  impacting  the  global  economy,  economic security, stability, and economic growth. The primary objective of  this  paper  is  to  examine  the  link  between  tax  evasion  and money  laundering  by  looking  at  their  historical  origins,  basic features,   strategies,   and   economic   repercussions.   Money laundering and evasion of taxes are organised financial crimes that  are  related  to  one  other,  either  explicitly  or  implicitly.  Laundering of money was once thought to be solely involved with trafficking of drugs and financing of terrorist activities. At this moment,  it  has  also  been  connected  to  tax  evasion.  The connection  between  both  crimes  is  not  well  understood.  Tax evasion is regarded a predicate offence for laundering money in certain jurisdictions, whereas it is not in others. This study finds that evasion of taxes is one of the most common motivations for laundering  money  activities.  Furthermore,  in  order  to  address these activities more effectively, this article suggests recognising tax  evasion  as  a  recognised  predicate  crime  for  laundering money.