- 10 Marks
AT – Mar 2024 – L3 – Q3c – Anti-avoidance measures
Explaining the difference between tax avoidance and tax evasion, examples of both, and limitations to tax planning.
Question
According to the Organisation for Economic Co-operation and Development (OECD), tax avoidance and tax evasion are terms which are difficult to define but are generally used to describe the arrangement of a taxpayer’s affairs intended to reduce their tax liability.
Required:
i) Explain the differences between tax avoidance and tax evasion.
(3 marks)
ii) Enumerate THREE (3) examples of tax avoidance activities firms and individuals are likely to engage in.
(3 marks)
iii) Identify FOUR (4) examples of activities that are likely to be classified as tax evasion and not tax avoidance.
(2 marks)
iv) Explain TWO (2) limitations to effective tax planning.
(2 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Illegality, Legal, Tax avoidance, Tax Compliance, Tax Evasion, Tax liabilities
- Level: Level 3
- Topic: Anti-avoidance measures
- Series: MAR 2024
