Sir, - As a former inspector of taxes and a practising tax-avoider, I am concerned at the lack of precision in the media reporting of this important subject. It does no justice to the debate to read of "tax dodgers and avoiders to face scrutiny".
Tax avoidance is the legal use of the provisions of the taxation codes to minimise individual or corporate liability to tax. Tax evasion is the deliberate concealment or mis-statement of reportable income or assets and is illegal.
The legality of tax avoidance derives from decisions in UK Inland Revenue cases which form the basis of Irish tax law. Lord Clyde, in the case of Ayrshire Pullman Motor Services and Ritchie v Inland Revenue (1929), states the case most succinctly as follows (which should be declaimed in Churchillian tones):
"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores. The Inland Revenue is not slow - and quite rightly - to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer's pocket. And the taxpayer is, in like manner, entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue." - Yours, etc.,
Cranmer Lane, Dublin 4.