Liechtenstein: Germany ignores the supply side of corruption

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I have got reports that German Finance Ministry spokesman Torsten Albig has said of the Liechtenstein tax evasion scandal sweeping Germany:

It is all about criminality ... the problem is not the possibilities presented by Liechtenstein, the problem is the criminal energies of German tax evaders.

Of course he's right to say that German tax evaders need to be tackled. They are the demand side of corruption.

He's absolutely wrong to say that the problem is not the possibilities presented by Liechtenstein. Liechtenstein and the professional firms and banks who operate there are the supply side of the corruption equation. One cannot exist without the other. The problem cannot be addressed unless both are tackled.

In truth what Albig has said is a shocking statement, and it goes to the core of what the Tax Justice Network (TJN) is concerned about. It has exact parallels with the argument TJN has been making about corruption (and TJN would consider tax evasion as a form of corruption). Corruption/tax evasion have a demand side (the kleptocrats, the tax evaders) and a supply side (not just the bribe-giver, as people have hitherto interpreted the supply side, but the international infrastructure that facilitates and promotes the cross-border flow of dirty money).

What Albig is saying, on this reading, "we care about the demand side, but not the supply side."

Germany is calling for a European wide approach to tackling tax evasion. One of the first things it will have to embrace is the understanding that the supply side has to be tackled if any initiative is to work.