By Jason Piper, technical officer, ACCA
Amid the debate about tax avoidance and evasion, the current Liechtenstein Disclosure Facility presents an interesting moral dilemma.
Why should an individual who chose to evade taxes many years ago – hiding their wealth offshore in an environment renowned for its secrecy – now be told that they effectively made the 'right' call and, by paying a small fraction of what should rightfully have been handed over to the authorities if they had paid the tax as it fell due, they can now be welcomed back into the fold and treated as if nothing had happened?
Meanwhile, those who dutifully submitted their returns and kept their affairs in order can rest easy in the knowledge that their future compliance will be every bit as valued as their past fidelity, and they are considerably poorer than their less civically-minded contemporaries.
How can this possibly be fair?
Fairness, however, is not the only thing governments are interested in. Cash can reliably be slotted into any 'Top 10 Most Important' list compiled on their behalf – and it's probably the only item that would be common to every government on the planet. Right now, it's a particularly pressing issue for the UK government, so a tax amnesty (well, several actually) makes good sense to the taxman.
Money collected under amnesties is far cheaper than money extracted by investigation and prosecution, and it arrives far more quickly too. If the quid pro quo is that slightly less is collected (because the level of penalty charged is slightly lower), then that is more than offset by the lower costs of collection. A bird in the hand for the UK's Revenue & Customs is most definitely worth two in their bush, particularly when the undergrowth is as complex as the average tax evader’s web of deceit.
So, if the impending spending cuts could be tempered a little by regularising the affairs of tax evaders, is the good that could be done with their money enough to offset the moral unease that accompanies the knowledge that they have put one over on the system?
Now that's something to think about. What do you think?