Tax and the proceeds of crime: a new approach to tainted finance?
| DOI | https://doi.org/10.1108/13685201311318476 |
| Pages | 119-125 |
| Date | 03 May 2013 |
| Published date | 03 May 2013 |
| Author | Michelle Gallant |
| Subject Matter | Accounting & finance |
Tax and the proceeds of crime:
a new approach to tainted
finance?
Michelle Gallant
Faculty of Law, University of Manitoba, Manitoba, Canada
Abstract
Purpose – The purpose of this paper is to investigate latter-day statutory initiatives imposing taxes
on earnings tainted by crime.
Design/methodology/approach – Case-law analysis of taxation in the context of criminal activity.
Findings – The taxation of tainted finance holds some promise for attacking criminal resources
though it is not a new strategy.
Research limitations/implications – Thefindings are preliminary and limited chieflyto Canadian
and UK law.
Originality/value – The paper considers the tax dimension of contemporary debates on criminal
finance.
Keywords Taxation, Tax, Proceedsof crime, Global, Civil forfeiture,Legislation, Case law, Crime
Paper type Research paper
Proposed as a strategy for tackling criminal revenues, the taxation of the proceeds of
crime proves less a new approach than a need to emphasize and encourage reliance upon
a standard practice of tax law. Taxing criminal finance merely means insisting that all
enterprises, whether lawful or not, contribute to public purse. Having set out the themes
raised by a tax-based strategy, this paper explores the reach of Canadian tax law, a legal
landscape that has not altered to permit the realization of a fiscal toll on tainted finance.
1. Taxing criminal proceeds
Intersections between crime and tax are not new. The evasion of the payment of a tax,
or some species of fraud on the public treasury, has long formed the basis of criminal
liability. American gangster Al Capone’s alleged nemesis was not smuggling illegal
liquor or a bullet from a rival: it was taxation law and his attendant failure to make
adequate payments to the public treasury (Calder, 1992). Nor is the idea of relying on
taxation to defeat profitable crimes a fresh approach: tax has long been ch aracterized
as a potentially potent instrument with which to wreak havoc on criminal activity
(Baker, 1951; Michigan Law Review, 1927).
Contemporary interest in taxation emerges as an integral, though subordinate,
element of the set of modern initiatives that target acquisitive crime[1]. It is invoked
as part of a project that includes the criminalization of financial aspects of crime
(money laundering regulation), the facilitation of the confiscation of criminal earnings
(post-conviction confiscation, or criminal forfeiture, laws) and the civil forfeiture, or
civil recovery, of resources derived from crime (Ryder, 2011, pp. 196-197)[2]. Money
laundering and confiscation, key components of the strategy, form the subject of a
series of global conventions[3]. Civil forfeiture – the taking of tainted property thro ugh
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
Journal of Money Laundering Control
Vol. 16 No. 2, 2013
pp. 119-125
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201311318476
Tax and the
proceeds of crime
119
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