Gibraltar Tax Department Urged To Get Tough On Tax Evasion

by Jason Gorringe, Tax-News.com, London

30 November 2005

Gibraltar's tax department has been told by the Principal Auditor to harden its stance against tax evasion by introducing tougher penalties and carrying out more thorough investigations into alleged evasion backed up by stronger legal remedies, the Gibraltar Chronicle reports.

According to the Principal Auditor's report, the Government’s global arrears total over GBP50 million of which some GBP31 million are income tax and corporation tax arrears.

The report also highlighted the tax department's apparent inability to deal with tax avoidance among high income self-employed professionals, and illustrated one case where a partner in an accountancy firm declared income of around GBP20,000, which, the Chronicle stated, was "accepted without question."

Another example of the tax department's lax controls was seen in the case of the declaration by one individual of a GBP1 million dividend which slipped through the net as a result of the corporate section failing to pass on appropriate paperwork to the self-employed section.

The Auditor also pointed out that no investigations have been carried out since April 1999, a situation which the tax department has blamed on insufficient numbers of staff.

The report suggests that the Commissioner should consider recommending to Government the setting of a legal time limit for the submission of accounts with penalties for failure to present these on time.

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