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TAX NEWS: Tax reform 'will overcome tax avoidance'. By Dan Martin

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16th May 2006
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The only solution to tax avoidance is comprehensive reform of the UK tax regime, the Institute of Directors (IoD) claims.

In a new report, the IoD called for redesigning the entire tax system and scrapping the "current artificial boundaries between things that are close commercial substitutes".

It said with taxpayers finding "ever more contrived ways" around anti-avoidance legislation and the government responding with complex legislation proposals, radical action is required.

IoD highlighted what it called "the moral ambiguity of tax avoidance".

It acknowledged arguments against avoidance such as competition distortion - those who engage in extensive tax avoidance pay less tax than those who do not.

However, it said while it is true that some businesses present more opportunities for avoidance than others - for example avoidance is much easier for financial institutions than it is for engineering firms - the fault lies with the tax system itself.

Richard Baron, IoD head of taxation, said: "Reforming the tax system would obviously not be an easy task. It would mean some drastic changes. However, the task may still be worth undertaking as the current approach is leading to an impossibly complex and confusing tax system.

"There is plenty of scope for a debate on what is or is not acceptable avoidance, if we take the view that we do have duties to each other.

"Both general principles and specific examples have their place in that debate. The government has every right to participate, but it will do so as an equal of all the other parties to the debate, not as an authoritative source of answers."

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By User deleted
23rd May 2006 11:33

Tax avoidance and Government spending
John Jenkins makes a sound point. And the problem is not confined to EU budgets. For we are told that a large and growing number of our people are dependent in whole or in part for their income from the state. So that any Government - of either so called left or right - would be commiting electoral suicide if they attempted to reverse the process. So the need for large revenues with which to support the status quo looks set to continue.

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By User deleted
22nd May 2006 13:27

Tax Reform and the wider aspect
Given that the tax system is indeed overburdened with complication and urgently needs reform isn't it so that the governments apparent need to bridge a tax gap and close all perceived loopholes is a symptom, an outcome. In that the disease lies elswhere in the existence of big government and an in an excessive need of funds with which to support it?

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By AnonymousUser
22nd May 2006 21:41

Tax Avoidance
The main problem here is that there is no such entity as "TAX AVOIDANCE". It simply does not exist. Once everyone realises it is just a ploy used by Government we can then get to grips with what the REAL problem is, which is a lack of funds to support what government wants to do. The EU is a bottomless pit which is set to get totally uncontrollable (perhaps it might even be there now). It will eventually bankrupt Europe.
Our present system cannot cope, so either Government cuts back on spending (which is what normal people have to do) or it devises a completely new system of collecting money to pay for its' promises.It is very interesting to note that young people are spending on credit cards then going bankrupt when they find their income cannot sustain repayments.
My view is that there has to be a new way forward, which has to include a very scaled down version of the EU. Many other EU countries are suffering lack of services or money; doesn't take too much working out why.
Perhaps there is a politician out there with guts to get things rolling. I had hoped that GB might be that person instead of being a hopeful PM in waiting.

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