Of course I argue that tax fraud miscreants should be chased to the ends of the earth to collect their ill gotten gains. Isn't that we expect as an outcome of all criminal investigations?

Compare this opinion with Teather's view (from page 81 of his IEA book on the benefits of tax competition) where, after discussing the activities of people who place money offshore and fail to declare the resulting income in their country of residence, despite the legal obligation to do so, he says:

“While I am not seeking to condone dishonesty or criminal activity, from an economic perspective this is merely another example of tax competition: indeed, it is often necessary behaviour in order to take advantage of tax havens. Without the willingness of some to engage in this sort of activity, tax competition would be much less effective and therefore reduce the benefits that flow from it for the rest of us. “

Ah, that's OK then. Breaking the law is fine and not paying tax is OK if it advances tax competition.

I leave you to take your pick as to which of our views might come closer to the ethical approach expected of a chartered accountant.

Posted by :Richard Murphy | April 26, 2006 8:57 AM

Well, I'm glad that Richard Murphy has read my book, and as far as page 81 as well (http://www.iea.org.uk/record.jsp?type=publication&ID=303 if anyone else wants to), but it's hardly a relevant point here - the ACCA debate is about Flat Tax, the UK's internal tax policy - not tax havens.

However, since he's dropping hints of unprofessional conduct, for the record:

1) I do NOT believe that illegal tax evasion is morally acceptable in the UK at the present time.

2) Sadly not all countries manage even our levels of fair governance, and in some countries and at some times tax evasion is sadly necessary. One doesn't have to go back to the treatment of Jews by the Nazis; even today this is an issue:

- ethnic minority Chinese in Indonesia are liable to persecution by the governing majority, particularly if they are known to be wealthy;

- the Congolese government, with no reliable rule of law, 'routinely seizes private wealth';

- corrupt Venezuelan tax officials sell information to violent kidnap gangs who cut off their victims' fingers;

- the Zimbabwe government violently seizes its opponents' assets.

There are dozens of other examples. Richard Murphy's own research shows that much of the money in tax havens comes from these countries. He wants to break banking secrecy and have these investors' details and assets reported to their home governments - even though this will often put their lives, and those of their families, at risk.

I don't mind him holding his views, but I do object when he claims the moral high ground for such proposals.

Posted by :Richard Teather | April 27, 2006 1:50 PM

Richard Teather seeks to avoid his own comments. His book contains no qualifications of the type he makes here.

And frankly these arguments are not valid. First of all, whilst there is no doubt that money from developing countries uses tax havens, there is absolutely no reason why those who are oppressed need use a tax haven to secure their funds. That can be done just as well by placing the funds in London as it can in Jersey or Grand Cayman. In addition, it is not the funds of the oppressed that flow from developing countries to tax havens. It is the funds of the corrupt and those in power that flow from those counties (and those in the developed world) to tax havens. That is the only possible explanation for more than 50% of wealth in Latin America being held offshore, or for the evidence presented to a tax tribunal in January this year that maybe 96% of credit cards issued by a UK high street bank through its Channel Islands’ branches to UK resident persons might be associated with tax fraud.

So please do not plead that tax havens help the oppressed. They are instead a mechanism for their oppression by facilitating capital flight from the developing world with consequent loss of taxation revenues and funds for development. The abolition of tax havens might, by itself, be the biggest single step that could be taken to relieve the world’s oppressed people.

Since flat tax theory encourages capital flight to tax havens this is part of that debate as well. On all points Richard Teather is wrong.

Posted by :Richard Murphy | April 28, 2006 3:11 PM

Hey guys - is this a taster or do you plan slugging it out here instead?

Posted by :Dennis Howlett | April 28, 2006 9:15 PM

Of course I argue that tax fraud miscreants should be chased to the ends of the earth to collect their ill gotten gains. Isn't that we expect as an outcome of all criminal investigations?

Indeed. Just like Michael Skinley (01:09:48) of Plymouth who has sold goods and taken enomous amounts in VAT but fails to pay VAT. see www.michaelskinley.com

Posted by :Anonymous | November 8, 2006 9:01 PM