The role Accountancy firms play in tax avoidance
Today, accountancy firms, which act as entrepreneurial businesses, have supplemented their conventional trade of selling auditing and accounting services through broadening their horizons into wide-ranging services and products. Ideally, they have come up with organizational strategies and structures to sell schemes for avoiding tax to wealthy individuals and corporations. Subsequently, the sale of these services changes tax burdens to less well-off citizens and less mobile capital. On the face of it, major accountancy firms are fundamental to the international tax avoidance industry. Through these firms, succeeding governments have decreased the higher rates of income tax. It has reduced the rates of corporate taxes, although this not restrained tax avoidance.
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. Ideally, penalties for poor audit are rather small when compared to penalties in certain areas such as those that are currently being levied on the banks. As a result, governments are forced to cut the rates of tax especially on corporate profits to subsidies and zero on companies that opt to invest in their countries (Walby 67). Through forensic accounting, firms that engage in continuous tax ought to be closed down. However, the trepidation of public exposure could hinder same from indulging in abusive schemes.
Farnsworth, Kevin. Social Versus Corporate Welfare: Competing Needs and Interests Within the Welfare State. New York: Palgrave Macmillan, 2012. Internet resource.
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