Offshore squalls

So Wikileaks now confirms what we have suspected for ever: rich, powerful people hide their money from tax authorities.

No names, no pack-drill but I often ask myself how the head honchos of big corporations (in DK for example) manage to work here and pay the taxes demanded. And how come the allegedly ever-vigilant tax folk don’t seem to do anything about it?

We shall now witness governments issuing their usual lip-service responses to the ‘news’, much sighing and tutting and promises of crack-downs, all lasting the requisite nine days; whereupon business as usual.

The people of Iceland will perhaps spill some blood but there’ll be no volcanic dust and the storms will be confined to tea cups around the world.

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  1. April 5, 2016 at 9:24 am

    We should drastically simplify our tax system and stop try ing to use it as a form of social engineering.
    The more simple it is, the harder it will be to avoid.
    Flat rate tax. Tax free for those below a certain income. The tax free allowance to wash out gradually to avoid step change anomalies.
    No family allowances, just step up the tax free element for each child.
    Abolish local taxation.

  2. Boadicea
    April 5, 2016 at 11:52 am

    Surprise! Surprise! Since ‘rich, powerful people’ make the laws regarding taxation, why are we so surprised that those laws are designed to allow those same people to find ‘legal’ ways of hiding their money from the tax authorities?

    Sorry Jazz, simplifying the tax system will not make it harder to avoid paying tax. No one pays tax willingly and however simple the system, everyone will endeavour to avoid paying any more tax than they have to. As long as there are loopholes in the laws and ways around the system people will continue to avoid paying what you and I think they should pay.

    I certainly agree that the tax-and-allowance system should be simplified. The tax-free threshold should be be higher and include allowances for children and other dependants. The whole ‘deduct for this” and ‘add on’ for that, which involves a whole load of administrators is quite daft. But it won’t stop tax-avoidance.

    The ATO (Australian Tax Office) is trying to crack down on multi-national tax-avoiders – and seems to be working with Tax-Offices elsewhere in the world. They may have some success, since most countries are pretty ‘p*d’ off with, mainly American companies, diverting their profits to avoid paying tax in the countries in which they operate.

    However, I doubt very much whether politicians here (or in the UK, Iceland or elsewhere) will ever pass sufficiently strong laws to deal with their own native tax-avoiders, since they are the very people who benefit from the ‘loose’ tax laws now in force.

  3. April 5, 2016 at 2:57 pm

    “…Sorry Jazz, simplifying the tax system will not make it harder to avoid paying tax. No one pays tax willingly and however simple the system, everyone will endeavour to avoid paying any more tax than they have to. As long as there are loopholes in the laws and ways around the system people will continue to avoid paying what you and I think they should pay…”

    The simpler the tax system is the fewer loopholes there are likely to be. I do agree however that people will always try to avoid paying tax.

  4. O Zangado
    April 5, 2016 at 3:04 pm

    For me, the elephant in the room is this. Of the politicos in the frame, none, with the exception of the Prime Minister of Russia and the President of Ukraine, earns a seven figure salary. Putin only earns officially 128,000 US Dollars.and Chinese president Xi Jinping gets a paltry US$ 20,600.

    Yeah, right, so where do the laundered billions come from?

    Our very own former Prime Minister of Portugal, one José Sócrates, is expected to go on trial later this year accused of squirrelling away more than 23 million Euros during his six-year tenure of office on a salary of a hundred and a few thousand Euros per annum. Nice work if you can get it.

    OZ

  5. April 5, 2016 at 3:30 pm

    No grass growing here. The Finance min has announced 100 individuals are to be investigated for offshore offences. Let’s see if owt ‘appens!

  6. April 5, 2016 at 5:14 pm

    If you need reassuring that democracy can work, take Iceland. The PM has gone!

  7. April 5, 2016 at 8:44 pm

    Boadicea: I agree with Jazz on the point of simplifying tax laws. There will never be perfect laws or perfect compliance, but the fewer laws the fewer loopholes and the higher the rate of compliance will be. It is telling that the ones who are most adamantly against the simplification of tax laws are lawyers and those who make a living helping people escape tax obligations.

    Janus: Icelanders have a tendency to drive crooks out of office. It’s a small island and there’s nowhere to hide.

  8. April 6, 2016 at 9:42 am

    Like ancient Athens in fact! 😎

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