ALP Says Bermuda Most Popular Haven For Australian Assets

by Mary Swire, Tax-News.com, Hong Kong

07 January 2003

The Australian Labor Party has urged the government to clamp down on tax evasion committed using vehicles established in offshore jurisdictions.

Speaking last week, Opposition assistant treasury spokesman, David Cox cited ATO figures for the last financial year, which revealed that the practice of dodging taxes in Australia by siphoning assets off to low tax jurisdictions has become increasingly prevalent amongst individuals and small businesses, whereas previously this method of tax evasion had mainly been associated with high net worth individuals and large organisations.

According to an AAP report, he announced that the Australian Taxation Office had identified four or five advisers aggressively promoting the use of offshore vehicles to individuals and SMEs.

'This was the first indication that there might be mass-marketed schemes where smaller taxpayers, individuals and small businesses, were starting to access foreign tax havens as a means of avoiding their obligations,' he told the news agency, adding:

'Last year there was about $8 billion in total movements between Australia and tax haven countries, with a net outflow of about $5 billion.'

According to the ATO figures, Mr Cox revealed, Bermuda was the most popular of such 'tax havens' for Australians, with some $2.5 billion departing for vehicles established there over the last financial year. He went on to urge the government to act quickly amend the country's tax code in order to prevent the practice from becoming widespread.

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