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This paper was presented at the Musgrave Memorial Colloquium, Sydney, 2 – 4 June 2008, organised by Monash University. This paper may also be referenced as [2008] UNSWLRS 40.

Abstract

Traditionally the topic of tax avoidance, or how to contain it, has not been a central focus of the public finance literature. This omission is slightly surprising given that tax avoidance, like tax evasion, has been around as long as tax itself and can have a major impact on so many aspects of public finance. But the lack of any major attention in the literature in the second half of the twentieth century may not be so surprising when one considers that it is only relatively recently that avoidance and evasion have become the major social phenomena that they now are. An army of what Tanzi and Braithwaite have respectively called fiscal and moral termites has been eating away at tax revenue bases throughout the world in an unprecedented fashion over the last thirty or so years, and with increasing vigour in the last decade. It is therefore appropriate that the topic of tax avoidance – and more particularly of how it can be constrained or contained – should be a key aspect when tax reform in the twenty first century is under consideration in this colloquium.

The principal objective of the paper is to identify, examine and evaluate some of the key trends in the responses that national governments and international organisations are currently making to the problems of tax avoidance. The conclusion is that national tax authorities, international tax organisations, and national and supranational legislatures and judiciaries, have at their disposal a large range of anti-avoidance strategies that are designed to deal, and are generally capable of dealing, with the onslaught of these so-called fiscal and moral termites.

Disciplines

Tax Law

Date of this Version

June 2008


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