The role of judicial cooperation in the fight against tax evasion and tax avoidance in the CEMAC zone

SUMMARY

GENERAL INTRODUCTIONSOMMARY

GENERAL INTRODUCTION 1

PART I: AN ANALYSIS OF THE ROLE OF JUDICIAL COOPERATION WITHIN THE FRAMEWORK OF THE FIGHT AGAINST TAX EVASION AND TAX AVOIDANCE IN THE CEMAC ZONE 20

CHAPTER I: AN OVERVIEW OF TAX EVASION AND TAX AVOIDANCE IN THE CEMAC ZONE 22

CONCLUSION OF CHAPTER I 38

CHAPTER II: THE OPERATIONAL ASPECTS OF THE COOPERATION IN PREVENTING TAX EVASION AND TAX AVOIDANCE IN THE CEMAC ZONE 39

CONCLUSION OF CHAPTER II 58

CONCLUSION OF PART I 59

PART II: THE PROBLEMATIC INHERENT IN PREVENTING TAX EVASION AND TAX AVOIDANCE AND THE NECESSITY OF ADOPTING A NEW APPROACH IN OTHER TO ENHANCE JUDICIAL COOPERATION IN THE FIGHT AGAINST TAX EVASION AND TAX AVOIDANCE WITHIN THE CEMAC ZONE 60

CHAPTER III: CHALLENGES FACING JUDICIAL COOPERATION IN PREVENTING TAX EVASION AND AVOIDANCE IN THE CEMAC ZONE 62

CONCLUSION OF CHAPTER III 71

CHAPTER IV: THE NEED OF ADOPTING A NEW APPROACH IN OTHER TO ENHANCE JUDICIAL COOPERATION IN THE FIGHT AGAINST TAX EVASION AND TAX AVOIDANCE WITHIN THE CEMAC ZONE 72

CONCLUSION OF CHAPTER IV 86

CONCLUSION OF PART II 87

GENERAL CONCLUSION 87

BIBLIOGRAPHY 87

ANNEXURES 87

TABLE OF CONTENT 87

GENERAL INTRODUCTION

I- Background and justification of the study

Tax evasion and tax avoidance are challenges faced by most if not all tax administrations in the world. These practices entails the payment of less due taxes either through fraudulous means or by using the loopholes of the tax system. The international impact of tax evasion and tax avoidance is as a result of globalisation and digitalisation which have facilitated the movement of capital from one part of the world to another, the relocation of multinational companies as well as high net worth individuals^1(*) in most attractive States.While this brought great benefits, it also provided the opportunity for these potential taxpayers to look for means to hide their financial affairs from tax authorities in order to evade and/or avoid taxes. Though estimates vary, due to the inherent difficulties in calculating them, the amount of hidden wealth across the world is thought to be highly significant. This does not only reduces the revenues available to provide necessary public services, but also risks undermining the people's confidence in the tax system as it damages the reputation of international financial centers.^2(*)

As a result of the aforementioned challenges, State cooperation therefore emerged as an adequate solution in the eyes of almost all actors, whether professional, political, administrative and judicial in other to ensure that all taxpayers pay the tax that is due. It is to enhance the need for integration and the demand for justice and financial security that the Member States of the Economic and Monetary Community of Central Africa (CEMAC) had to set up mechanisms of judicial cooperation^3(*) in other to efficiently fight against tax evasion and tax avoidance.

It is worthwhile noticing that, the idea of cooperation in Africa in general and particularly in the CEMAC zone is not a new one. Indeed, before independence, colonial administrations had already set up mechanisms for collaboration between its various colonies. Subsequently, this cooperation was extended to different fields, such as the judiciary. In Central Africa for example, the first standard for judicial cooperation was bilateral. As from 1960, France had extended cooperation agreements with some of her former colonies of both French Occidental Africa and French Equatorial Africa from judicial to other domains such as tax.^4(*) The aim here was to efficiently prevent double taxing, tax evasion and tax avoidance.

The first conventions dealing with judicial cooperation between African States dates back to the twentieth century with the very first one being the «Convention Généralede Coopération en matière de justice 1966.^5(*) Furthermore, the years following independence were characterised by the multiplication of regional and sub-regional groupings and as such, more agreements were concluded within the framework of judicial cooperation. They included inter alia theagreement on judicial cooperation between the CEMAC Member States, the Convention on cooperation and mutual legal assistance between the Economic Community of Central African States (ECCAS) member States. The texts governing judicial cooperation in Central Africa relates principally to the criminal matters and accessorily to the civil, commercial, administrative and family domains. For some, judicial cooperation is limited to the criminal matters only.^6(*)

The year 2009 was a milestone in the fight against tax evasion, tax avoidance, as well as money laundering when the G20 declared that «the time of banking secrecy and tax evasion was over».^7(*) One of the major decisions taken at the summit that year was to set up of the World Forum on Transparency and Exchange of Information for Tax Purposes^8(*), in order to force countries to cooperate on issues of international taxation. The measures taken during this forum aimed at preventing taxpayers from hiding behind banking secrecy to deceive tax authorities.^9(*) Faced with the above mentioned phenomena, the Organisation for Economic Cooperation and Development (OECD) recommended through the world forum on transparency the enactment of a series of measures such as the exchange of information for tax purposes in other to prevent countries from using fraudulent manoeuvres aimed at attracting capital and investors.^10(*)

In practice, the cooperation in the fight against tax evasion and tax avoidance is characterised by the predominance of administrative cooperation over judicial cooperation. That notwithstanding, we shall try in the course of our work to bring out the role of sub regional judicial institutions in the curbing tax evasion and tax avoidance first, before delving into the role of administrative institutions in preventing the above mentioned fiscal malpractices. Our study will therefore follow this pattern by demonstrating the administrative aspects of the cooperation accessorily and principally judicial aspects thus justifying our theme: «The role of judicial cooperation in the fight against tax evasion and tax avoidance in the CEMAC zone».However, before outlining the role of the said judicial cooperation, it is worthwhile precising the methodological and theoretical framework of the study (VIII), the hypothesis (VII) which largely depends on the problem statement (VI), the literature review (V), the interest (IV), definition of terms (III) and the delimitation of the study (II).

* ¹ Sports men, actors, politicians, businessmen etc.

* ² https://www.oecd.org/tax/transparency/who-we-are/about/ Accessed on 20/07/2021.

* ³ Théophile NGAPA,La coopération judiciaire pénale dans la zone CEMAC, (on line) Mémoire : DEAen Droit Communautaire et Comparé CEMAC, Université de Dschang 2005. (accessed on the 09/07/2021) available on https://www.memoireonline.com/03/08/989/cooperation-judiciaire-penale-zone-cemac.htm.  

* ⁴See the tax agreement between France and Burkina Faso signed on the 11^th August 1965, the tax agreement between France and Cote d'Ivoire signed on the 6^th April 1966, the tax agreement between France and Senegal on 29^th March 1974, the tax agreement between Cameroon and France signed on the 21^st of October 1976, the tax agreement between France and Congo signed on the 27^th November 1987, the tax agreement between France and Gabon signed on the 20^th September 1995 etc.

* ⁵The « Convention généralede coopération en matière de justice » was signed in Tananarive presently called Antananarivo (capital of Madagascar), on the 12th September 1961 and entered into force on the 30th January 1962. It has the followings signatories; Cameroon, central Africa republic, Congo, Côte d'Ivoire, Dahomey (Benin), Gabon, Upper-Volta(Burkina Faso), Madagascar, Mauritania, Niger, Chad.

* ⁶HUVET (J.) et al, EUROJUST : La pertinence de la coopération judiciaire au sein de l'Union européenne, Mémoire en contentieux européen ; MEGIE (A.), « Généalogie du champ de la coopération judiciaire européenne » ; cited by Théophile NGAPA, La coopération judiciaire pénale dans la zone CEMAC, Mémoire : DEA en Droit Communautaire et Comparé CEMAC, Université de Dschang 2005.

* ⁷The G20 or Group of Twenty is an intergovernmental forum comprising of 19 countries and the European Union (EU). It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development. The G20 is composed of most of the world's largest economies, including both industrialized and developing nations. The group collectively accounts for around 90% of gross world product (GWP),75-80% of international trade,^[ two-thirds of the world's population, and roughly half the world's land area.

* ⁸With 162 members, the Global Forum on Transparency and Exchange of Information for Tax Purposes is the leading international body working on the implementation of global transparency and exchange of information standards around the world.

* ⁹ Joël Samuel NZIE, la souveraineté fiscale à l'épreuve des exigences de la transparence fiscale internationale, Cas des états de la zone CEMAC,(on line) Mémoire : Université de Douala, 2014. (accessed on the 09/07/2021) available on https://www.memoireonline.com/02/20/11560/m_La-souverainete-fiscale--l-epreuve-des-exigence-de-la-transparence-fiscale-internationale-Cas-d30.htm.

* ¹⁰Ibid.