The distinction between tax avoidance and tax evasion has become blurred in Australia: why has it happened?

The distinction between tax avoidance and tax evasion has been well established in the Australian taxation system. However, for some time the Australian Government has ignored the difference between the two concepts when it comes to Australians using tax havens and being investigated as part of 'Project Wickenby'.1The Australian Government is deliberately labelling all attempts to minimise income tax through the use of tax havens and offshore financial centres (OFCs) as tax evasion and therefore a criminal act. There have been examples quoted in the press where the Australian Crime Commission, conducting investigations as part of 'Project Wickenby', have gained access to Swiss bank records on the basis that the Australian taxpayer has been involved in suspected tax fraud when this was not the case.2 Is this one of the main reasons why the Australian Government is ignoring the distinction in order to detect money held in tax havens? This paper will examine the distinction between the two concepts and try to provide an answer for the approach being taken by the government.