Has the distinction between tax avoidance and tax evasion become blurred: is this simplification or is there another agenda?
The Australian common law recognises the important distinction between tax avoidance and tax evasion but the current trend in Australia is for the Australian Government to ignore the difference between the two concepts. It is highly questionable that the difference is being distorted because of a desire to simplify this area of the law. It will be contended in this article that there is a deliberate attempt by the Government to treat tax avoidance as constituting tax evasion and to ignore the legal distinction between the two. For example, the new law to deter the promotion of tax schemes, Division 290, Taxation Administration Act 1953 (Cth) ignores the distinction between tax avoidance and tax evasion and deals with 'tax exploitation schemes' instead. The Anti-Money Laundering and Counter Terrorist Financing Bill (AML/CTF Bill) is another example of the blurring of the distinction between tax avoidance and tax evasion because it allows government agencies to detect Australian taxpayers using tax havens by requiring their accountants, lawyers and financial advisers to report 'suspicious transactions' that involve the transfer of money between tax havens and Australia. It is argued that the Australian Government and the OECD are deliberately labelling all attempts to minimise income tax through the use of tax havens and offshore financial centres (OFC'S) as tax evasion and therefore a criminal act. If tax minimisation amounts to a criminal act then sovereign tax havens can be encouraged to disclose information on foreign investments in their country and breach their own bank secrecy laws. Is this what the Government is trying to achieve by blurring the distinction?