Tax Evasion, Avoidance And Planning: Evolution Of Jurisprudence

"Every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be."

Introduction

Though the terms tax evasion, avoidance and planning might appear interlinked, they have different connotations jurisprudentially. In general parlance, tax planning is a legitimate means of arranging taxes in a manner that reduces the overall tax liability. Tax avoidance has been defined by the Organization for Economic Co-operation & Development ('OECD') as the "arrangement of a taxpayer's affairsthat is intended to reduce his liability and that although the arrangement could be strictly legal is usually in contradiction with the intent of the law it purports to follow." On the other hand, tax evasion refers to the unlawful escaping of tax liabilities.