Stories from Richard Murphy this last few days provide the opportunity for alternative views:
Some Stories Run and Run commenting on Bono’s tax arrangements:
Could it just be that people really do think there’s something seriously wrong with being a do-gooder and then structuring your affairs through a tax haven? Is there in fact a moral conscience on this issue? I think that might just be the case.
I’ve not heard of hypocrisy being debated as a moral construct recently but it’s an interesting idea. Personally, I think the hypocrisy card is a lot easier to play and understand by the man in the street. Whether that leads to moral indignation has yet to be tested. ‘Morality’ as a concept is very difficult position to sustain.
These Banks Should Be Ashamed of Themselves where Richard comments on the recent SC decision to grant a Section 20 notice where there appears to be significant tax at risk. He says:
As for the banks involved: each should be ashamed of two things. The first is that someone somewhere must have had suspicion about these accounts and yet the institutions in question did nothing about them. Second, I think they should be ashamed of the defences put forward for not disclosing.
Commissioner John F. Avery Jones does not find such issues:
I emphasise that no allegation is made against the Financial Institution.
This is either curious or plain wrong. In some cases, HMRC is expecting significant yield – 3 cases, £2.5 million:
In all cases there was both undeclared offshore bank interest and undeclared trading profits…they demonstrate the likely connection between undeclared foreign bank interest and other undeclared profits.
If there are undeclared trading profits then what the heck was going on? Brown envelopes handed over the counter? Full trading activities? Yet the banks are innocent of any involvement? Odd. I rather suspect we’re talking rocks and hard places. If HMRC infers the banks are involved then the FSA will have something to say about compliance. If, as I understand, RBS is involved then it wasn’t so long ago FSA slapped them with a £750K fine under the KYC rules. I wonder if Avery Jones was appraised of this at the time of the hearing. I suspect the banks were not willing to put up too much of a fuss yet had to be seen to defend cusrtomer rights to privacy (as they interpret that right.)
Finally, I consider whether under section 20(7) I am satisfied that in all the circumstances the Inspector is justified in proceeding under section 20. In doing so I must weigh up the burden imposed on the Financial Institution with the benefit to the Revenue.
This is weird. Who the heck cares what it costs the bank to furnish the information? If there’s sufficient tax at stake to make pursuing investigations worthwhile, then make disclosure unconditional.
Closing the Floodgates – TJN Report. This is a polemic. It is well worth the reading effort because for the first time, it tackles the supply side of tax abuse in a compelling manner. There are some weaknesses in the argument. It depends on a definition of ‘corruption’ that embraces commercial activities that while logical is far from universally accepted as appropriate. It also depends on making causal links between crime and tax abuse. That may be true but it is extremely hard to prove except in the possible case of tax evasion.
TJN is tackling huge issues and is to be applauded for its efforts. I do wonder whether some of its thinking could be a little too ambitious and may lead to TJN being stretched thinly.
It is hard to see how many of the abuses currently occurring can be tackled when so many nation states have wildly different tax systems and approaches. And to be perfectly blunt, success will be limited unless the US and UK are jointly prepared to unequivocally signal action on the world stage. That seems highly improbable except on a very limited basis. The US didn’t sign up for the Kyoto agreement. Why should its politicians sign up for anti-avoidance laws that are almost certain to prove unpopular with a super rich and powerful segment of the population. I don’t see it but I await with interest.
Technorati Tags: tax avoidance, tax evasion, tax gap, tax havens, tax justice, taxresearch
