Illicit finance has come to be a significant issue not only locally, but also internationally. There are numerous delineations of illicit finance, but fundamentally it comes about from the practices, approaches and crimes targeting to transfer financial capital within and out of a nation in violation of national and global laws. Across the world, government administrations are working in tandem and joining forces to combat different illicit financial flows, which include tax evasion, global bribery and money laundering (OECD, 2014). Despite the fact that the precise scale of the problem is unidentified, illicit finance has had shattering and disparaging effects on developing nations. In the recent number of years, nations have executed and put into practice standards and abided by most recommendations provided (OECD, 2014). The fight against illicit finance is largely dependent on the quality of state regulations and whether they abide by the set global best practices. This paper purposes to delineate some of the successful and unsuccessful practices in countering illicit finance and the reasons why. Tax Evasion

One of the key elements of illicit financial flows is tax evasion. Endeavors to increase tax collection in developing nations are emphasized on reinforcing the basic capability of their tax administrators to collect different taxes. However, this has not proved to be successful with such nations failing to live up to their tax potential (OECD, 2014). For instance, statistics indicate that nations in Sub-Sahara Africa continue to muster less than 17% of their gross domestic product (GDP), lower than the minimum level of 20% that is deemed vital by the United Nations to accomplish the Sustainable Development Goals (SDGs) (OECD, 2014). Global initiatives to restrict tax evasion and take into account the earnings of crime are being implemented for about 20 years, steered outstandingly by the OECD/Global Council on Taxation among others. Nonetheless, these determinations have not been adequate or fully successful to curtail illicit finance, thus a new and strengthened method is necessary. Curbing illicit finance will also necessitate...

Some of the successful activities encompass the closure of tax havens and loopholes. For instance, South Africa was able to recuperate $2 billion in taxes subsequent to tax authorities uncovering a multinational firm taking part in foul transfer pricing (Gossel, 2016). In the contemporary, tax evasion as an illicit financial flow ensues owing to the lack of vital financial, administrative as well as human resource proficiencies for establishing and enforcing effective tax systems (Herkenrath, 2014).
Money Laundering

Money laundering encompasses individuals that generate illegal wealth seeking to place such wealth away and far from their own nations not just as a means to evade scrutiny, but also as a way of branching out asset portfolios and thinning out risk. According to OECD (2014), some of the most successful and effective implements of combating illicit financial flows are anti-money laundering (AML) and counter-terrorist financing (CTF). Despite the fact that the Financial Action Task Force (FATF) Mutual Evaluation Review process, in conjunction with supplement appraisals and assessments by FATF-style regional bodies (FSRB), have aided in enhancing the amenability of OECD nations with the FATF principles, some flaws continue to exist in their anti-money laundering rules (OECD, 2014). This can be perceived by the fact that huge financial and non-financial institutions in the Western realm are able to undertake the reception, transference and management of illegal funds from developing…