EUROPEAN PLANS to crack down on tax avoidance have been welcomed by the ICAEW’s chief executive.
In his blog, Michael Izza (pictured) says that the EC’s plan to fight tax dodgers – badged as a ‘Fight Against Fraud and Tax Evasion’ – through the use of information sharing and general anti-avoidance rules is a “real opportunity” to create a consistent and fair approach to corporate and personal tax.
“We need a system that allows businesses to do what they are best at doing; creating useful products and services, and making profits, while contributing fairly to society,” said Izza.
He said that the current tax system was set up at a time when “business was much simpler”. Concerns now abound about the erosion of the tax base due to its “policing” through transfer pricing and the arm’s length principle.
The institute sparked controversy earlier this year by taking a strong stance against aggressive avoidance, outlining to members where it believes they could fall foul of its rules about peddling certain types of tax scheme.
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A total of £16bn was lost through tax fraud last year, according to estimates released by Pinsent Masons
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Additional tax a result of compliance investigations by HMRC, but overall revenue falls