Over the past month, following the panama papers, the government has announced a new tax evasion law. This comes after a huge leak of names of high-profile individuals using offshore tax havens. Amongst them was the prime minister’s father himself. The prime minister shortly published a copy of his tax returns, to calm the feud that had begun.
In light of that, new legislation is being formed to put an end to this.
The new tax evasion law will aim to stop companies allowing their staff to evade tax. The prime minster has said:
‘This government has done more than any other to take action against corruption in all its forms, but we will go further.
‘That is why we will legislate this year to hold companies who fail to stop their employees facilitating tax evasion criminally liable.’
There has also been talk of setting up a fact finding commission into investigating all evidence of the illegal doings that were leaked in the panama papers.
The government hopes that this move will be pushed on a global scale, with a more global approach to stopping fraud. These plans are soon to come together when the prime minister hosts the ‘London’s anti-corruption summit’. Being the first of its kind there are huge hopes for the potential positive impact it could have. As representative and leaders from across the globe will come to discuss the issue.
This new law is also set to hit multinational firms with large sales and customer bases, forcing them to reveal how much tax they pay in the EU and how much they don’t pay tax on in offshore havens.
There’s has been great argument and dispute over it being a ‘compliance nightmare’. Experts have argued that it would put companies in the UK at a disadvantage because they would have to deal with an added layer of legislation that other companies around the world would not have to compete with.
Others have also argued that the enforcement of the tax law would make up a significant amount of time and money. And therefore the amount of money being earned would not be worth the amount taken to enforce the law. They argue that tax-payer’s money is better off spent elsewhere.
Experts have advised the government to not hasten in this decision and to scrutinise all the implications of the new law.
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