Tax avoidance culture still thrives despite clampdown
The game of cat and mouse between tax authorities and citizens has been played for a very long time. People have been dodging taxes for centuries. But the more nuanced and sophisticated game of avoiding tax is a more recent phenomenon. Indeed, when it comes to tax avoidance the game is played between the tax authorities and the financial advisers who come up with scenarios, schemes and constructs, to help avoid tax being paid.
The late British politician Denis Healey once said the difference between tax evasion and tax avoidance was the thickness of a prison wall. It is a useful quote because it illustrates the sizeable gap between something legal and something illegal, but it also places both activities on a similar moral plain.
I remember asking a very successful Irish tax adviser how he got started. He said he used to go to England and see what loopholes the British tax authorities were closing down. Then he would put a scheme together in Ireland for a client, based on that loophole. He knew the Irish tax authorities were years away from identifying and then shutting them down compared to their counterparts across the water.