Natural resources and tax avoidance

摘要: The Democratic Republic of Congo (DRC), widely considered as one of the richest countries in mineral deposits in the world, regularly sits high on various lists ranking the world’s poorest countries. Each year, the country loses billions of dollars in tax revenue as wealthy individuals and local and multinational corporations take advantage of DRC’s weak tax legislation and enforcement to funnel profits abroad including to foreign financial centers. A similar situation plays out again and again throughout many countries in Africa, and across other parts of the world.Capital flight, here defined broadly as money or securities rapidly flowing out of a country, can take several forms. Illicit financial outflows constitute a form of capital flight from developing countries. Over the past decade, the democratisation process in developing countries and the subsequent increase in transparency and accountability suggest that illicit financial outflows might be on the decline.