Tax evasion and avoidance have become common and is raising concerns over the effective funding of government administrative functions. It is therefore imperative that the government develop strategies that would help it reduce the cases of tax evasion and avoidance as this is eating into the country’s financial policies. People who deliberately avoid tax by hiding their wealth and income tend to pose a great challenge to the society. In the country’s effort to adjust the economy and eliminate the balance of payment deficit, it is essential to detect and follow up tax evaders and ensuring that they pay up. The world is currently experiencing technologically-driven transformation in the way business is done. The private sector is a pioneer in technology application in daily business operation including honoring of tax obligations. It is therefore advisable that the government need to seek collaboration with the private sector to develop a workable technologically driven mechanism of curbing the tax evasion menace. One of the greatest challenges is the range of data available. The government need to formulate a legal structure that is able to capture the property and assets of various entities in the country so that it can easily close down on the tax avoiders. This may be achieved through the use of sophisticated technology to analyze the purchase of property, bank loans, individual and corporate tax returns (Koniordos, 2005). The government may also target bank accounts and the employment data with the aim of identifying asset property, mark and trace financial transactions that raises suspicion and point out those who are trying to keep their wealth and income off the sight of the authorities with the aim of evading tax. Incorporation of technology in implementing tax policies also means that resources will be freed and skilled manpower from the private sector will enhance chances of rounding up tax evaders. Past records indicate that by 2010 review of the UK government’s spending, over ? 900 million to attempt to solve the problem of tax avoidance, evasion, economic fraud through increasing the size of the human capital base on this issue, invest in more skills, increase the use of data from a third party and consistently develop mechanism of tackling the slippery tax evaders and the hidden wealth. By 2012, the government stepped up its campaign of challenging the citizens to honor the tax obligation in the spirit of boosting economic growth for the general welfare of the society. The efforts of the government to apply various tax policies have always been ineffective and this explains why further remedial measures are needed. The governments of UK has been making many efforts to exploit the opportunities offered by the available data and modern technology to unveil the hidden wealth and income and to hasten its efforts in curbing tax evasion. One of the approaches that can yield better results is curtailing offshore banking fraud that is one of the greatest loopholes of tax evasion. The government need to access data with the aim of identifying linkages of such foreign accounts to some people. If the account holders are found out they should be compelled by the government to pay interest on top of taxes so far unpaid as a penalty. The actions that are important to recover such unpaid taxes entails co-ordination with foreign countries’
Tax Evasion Name Institution The current economic structure of the globe is highly influenced by the emerging trend in the political environment that keeps realigning itself. This has lead to liberalization of most economies and open trade. It is worth to note that the increasing expenditure of countries arising from the exponential population growth strains government coffers…
For instance, an assessee has to pay 10% tax when his income is ?100,000, and he is required to pay 30% tax if his income is ?300,000. Majority of the countries around the world follows the progressive taxation as they conceive the same as more fair. Under progressive taxation, the difference between the distribution of income before the taxation and the distribution of income after the taxation is of great importance.
Tax evasion is the illegal concealment or avoidance of a tax, while tax avoidance is the legal effort to arrange the affairs of the entity in such a way as to minimize taxes. For individuals, there is no way to legally avoid taxes in an offshore environment.
Tax avoidance is a means to escape from taxation, which is allowed and sanctioned by law. A taxpayer committing this will not be legally held civilly or criminally liable to the government provided it is used in good faith and within the process allowed by law, otherwise the taxpayer will be committing tax evasion which is a crime.
Tax evasion is a social deviance by the elite community working in white collar jobs. Tax evasion is a conscious avoidance to pay tax. Elite deviance refers to wrong doing of powerful and wealthy organizations and individuals who refuse to pay tax. The organizations or individuals evade paying tax by making corporate contributions and illegal campaign contributions that aim at deceiving the public and the government.
Implementing of taxes on various transactions of different product categories must be at a level that allows the country an opportunity to achieve the desired objectives in the economic spheres, social programs and defense. Taxation is significant in terms of increasing a country’s reserve amount and regulating business policies, with the aim of maintaining national development and competence at the international scale (Moffat, Bean, & Dewar, 2005, p.45).
Though CSR initiatives was initiated by the multinational companies with the objective of returning something to the society for supporting them in generating revenue, however, soon it became a method to save some money through activities like tax evasion.
Businesses need tax planning to help implement strategies that would lessen their tax liabilities for the year ahead. There are numerous tax planning strategies available to business owners. Regardless of how simple or how complex a tax strategy is, it will be based on structuring the business transactions to accomplish anyone or more of the following goals: 1) reducing the amount of taxable income, 2) reducing the tax rate , 3) claiming any available tax credits, or 4) controlling the effects of the Alternative Minimum Tax.
For individuals, there is no way to legally avoid taxes in an offshore environment. However, there exist numerous opportunities for juristic entities such as corporations, foundations and trusts to avoid taxation by operating in multiple, carefully chosen jurisdictions using