International Financial Flows (IFF) have different definitions. However simply put, it is the movement of money in all its forms whether in cash, goods, services from one country to another. However, this money has certain characteristics; it may be illegally earned (e.g. black money), illegally transferred (through smuggling of cash or an illegal trade like ivory trade) or illegally utilised (for example through purchase of narcotics) making IFF both legal and illegal. My policy brief for the Association for Women’s Rights in Development (AWID) titled “Why illicit financial flows are a feminist issue!” explains not only what Illicit Financial Flows (IFFs) are, but also what their causes are and the effect IFFs have on gendered concerns.
What is tax evasion and tax avoidance?
Both tax evasion and avoidance are decided upon at the domestic level within a state through law, policy and regulation. Evasion or avoidance varies between different states because it is specifically based on the laws of a state.
Tax evasion includes ways of reducing the amount of taxes one pays to the state that has been declared illegal by virtue of domestic laws declaring it as such. It is a crime. Tax avoidance includes methods of reducing tax due to the state by using the law, absence of laws or absence of clear laws to reduce the amount due. It is not necessarily illegal however it is considered morally reprehensible (Riddle, 1981).