TaxCorporate TaxGovernment vague on tax avoidance definition

Government vague on tax avoidance definition

Tax avoidance usually 'inappropriate' behaviour says Labour Lord

The government has admitted that tax avoidance has no proper legal
definition, but usually means an ‘inappropriate’ reduction of tax liability.

Following a question from Lord Patten over the clarification of tax evasion
and avoidance, Lord McKenzie of Luton responded: ‘These terms lack any single or
universally applied legal definition and their meaning will depend upon the
context in which they are used.’

He then went on to say that evasion was the reduction of tax liability by
illegal means while avoidance usually refers to an inappropriate reduction in
tax liability that did not have the economic consequences that parliament
intended.

The government has stated that it aims to make tax avoidance ‘not worthwhile’
by 2008.

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