CRACKDOWN ON TAX AVOIDANCE ESSENTIAL, SAYS MP
Friday, 09 July 2010
In a Westminster Hall debate earlier this month, local MP John Pugh stressed the importance of tackling tax avoidance, calling for an anti-avoidance law to be introduced to crackdown on an issue that is costing the Government milions of pounds.
"There are potentially massive sums that could be obtained through clamping down properly on tax. In 2008-09, for instance when the Government did crackdown, 12 billion of extra revenue was made. This just shows how much avoidance is going on. At a time when we face dealing with a large deficit, consideration about how this money is recouped is essential."
"Countries tend to take an 'after the horse has bolted approach' to dealing with tax avoidance. Having a law would ensure that things are far easier to regulate."
"The argument usually used against implementing such a law is that it would lead to capital flight. However, Japan and Australia have already implemented such a law and it has not lead to this. It would also mean that less time would be spent by the Treasury devising complicated defences against it."
Dr Pugh also raised the issue of closure of tax offices, in light of the recent decision to close Southport's HMRC office: "It is suggested that cutting the number of local tax offices is not helping in that respect. The tax office in my town has disappeared; I am told that the net effect is that all sorts of local knowledge has gone, and that as a result there will be more tax avoidance. I do not know for sure whether that is true; high-ranking people at HMRC tell me a different story.
"HMRC has nailed its colours to the mast, putting its faith in software rather than in manpower. I hope that it is right. However, we need some of the right people, and I am not convinced that we have enough of them. I would like more of them to help solve the enigma of why some extraordinarily profitable companies pay surprisingly little tax."