Businesses are finding themselves trapped in a double edged sword situation, where refusing to partake in these illicit transactions means losing lucrative opportunities, while succumbing to the pressure to pay kickbacks undermines the financial integrity of transactions and creates a taxation conundrum for the business paying the kickback especially if the kickback forms a sizeable component of the transaction.So the dilemma is pay the kickback and the transaction won’t make commercial sense or don’t pay the kickback you lose the business altogether. This creates a Catch-22 for businesses, a classic case of heads you lose, tails you lose.
The repercussions of this systemic issue are far-reaching, as businesses find themselves ensnared in a struggle to account for and treat a transaction as wholly legitimate, even though a portion of it is done off record on their side(the kickback component).
