Was Ritchie right on the tax gap?
Posted by Christie Malry on September 16, 2010 at 10:29 am
Via Twitter, we find the following in the Tax Journal:
The Chancellor has told MPs that they will be ‘pretty staggered’ by new, independent estimates of the tax gap.
‘Labour members seem to forget that their people were in power for 13 years. We have inherited this situation, and we will be taking steps to reduce tax avoidance, including tax avoidance by the richest people in our society, so that everyone makes a contribution,’ George Osborne said during a Commons debate on public expenditure cuts.
The Guardian reported that the figures would be published by the Office of National Statistics this week.
Osborne added: ‘We are putting in place the measures that I believe will improve HMRC and enable it to focus on reducing that tax gap.’
Ritchie will, for the second time in a day, be pleased as punch. Yet I suspect this isn't the knockout punch he's hoping for. This is probably a bit of Osborne politicking. It's good to put the boot in to your predecessors, especially over something as emotive as tax. If he can suggest that the last lot left unpaid tax with vested interests, it makes them look bad and him look good. It also lets him keep the pressure up on big business, in case they get any ideas about how a Conservative government might treat them.
And that remains true, even if the tax lying in the supposed gap never gets paid (because it doesn't exist). In the meantime, Ritchie is most welcome to address properly the criticisms of his prior work on the tax gap, such as his complete abject failure to account for double tax relief, or his gross overestimation of the tax gap that arises from the black economy.



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