Targeting tax crime: A whole-of-government approach - September 2012
The seventh issue of Targeting tax crime: A whole-of-government approach (PDF, 5.21MB) is now available.
A new report by the Tax Justice Network claims there could be up to $21 trillion stored away in offshore accounts world wide. There is no question that tax evasion costs society. Money sent offshore represents lost revenue for the country, a shortfall that honest taxpayers then subsidise. The value, to the wellbeing of Australians, of the work we do in exposing those deliberately seeking to avoid their tax obligations should not be underestimated.
One of the ways we effectively fight this global problem is through partnerships with other government agencies and tax administrations - both domestically and internationally.
Locally, information sharing, data matching and the use of enhanced technologies are now firmly entrenched in a range of Commonwealth agencies. Our success in deterring and catching those who illegally abuse offshore havens is evidenced by AUSTRAC figures that show fund flows to prominent haven destinations have decreased significantly and fund flows back into Australia from these jurisdictions have increased.
Globally, we continue to work with tax administrators and other regulators in a more coordinated and cooperative way to address tax evasion.
Australia has an extensive network of double tax treaties and information agreements encompassing a total of 77 partner jurisdictions. We contribute to OECD forums on tax administration through the Forum of Tax Administration (FTA) and the Global Forum on Transparency and Exchange of Information for Tax Purposes. In the Asian region, we are a strong supporter of the Study Group on Asian Tax Administration and Research (SGATAR). We are also a founding member of the Joint International Tax Shelter Information Centre (JITSIC)
This collaborative work provides valuable support and the opportunity to share best-practice with our international counterparts, thus tightening the net on those seeking to evade tax and exposing cross-country avoidance schemes to greater scrutiny.
This edition explores how international administrations, including the UK and Italy, are applying pressure to those deliberately operating outside the intent of the law in a bid to build a culture of compliance, raise awareness and trigger a cultural shift in attitudes towards tax as the price we pay for a civilised society.
In the UK, public tolerance for tax avoidance is at an all time low, particularly since the introduction of the austerity measures following the global financial crisis. Danny Alexander, Treasury Chief Secretary, recently commented that in the UK unpaid tax costs taxpayers an extra two pence in every pound. David Hartnett, outgoing Permanent Secretary for tax at HMRC, shares his perspective on the changing perception of tax crime in the UK in this edition.
In another feature this edition, the Italian Revenue Agency's bold advertising campaign calls tax evaders 'parasites on society', while also highlighting the relationship between paying taxes and improved public services.
We have also provided a link to a video clip from Sweden on the cash economy.
Willing and proper participation in a country's tax and superannuation systems is a sign of good citizenship - this is the essence of the ATO's strategic statement 2010-15.
As the future health of the revenue system will be in the hands of our youth, we have had the support of young Australians as one of our key strategies for some time. Just recently we've launched the digital curriculum resource for secondary schools called, Tax, super and you which you can read about in this issue.
It's part of a broader strategy of getting all Australians to think about and value the services and infrastructure our taxes fund, and the importance of their support to the effective operation of their tax system.
Public opinion on tax avoidance
I recently received a letter from a senior partner at a prominent accounting firm. The letter expressed anger over an article about the behaviour of certain individuals using secrecy havens, among other things, to avoid tax. Like many other taxpayers who pay their fair share of tax, the view is that this behaviour should not be tolerated when honest taxpayers have to pick up the cost of people who avoid their obligations. I share this view and don't want honest Australian taxpayers to pay one dollar more than the community thinks appropriate in the laws that underpin our way of life.