THE AUTHOR IS A FORMER IRS OFFICER WITH STRONG TAX LITIGATION BACKGROUND.AUTHOR IS A FREELANCE INCOME TAX CONSULTANT LOCATED AT MUMBAI,BELONGING TO THE 1989 BATCH OF INDIAN REVENUE SERVICE. TOOK VRS AFTER ALMOST 32 YEARS OF SERVICE FROM THE POST OF PR.COMMISSIONER INCOME TAX.FUNCTIONED AS DR IN ITAT OF LUCKNOW,JABALPUR ,INDORE AND MUMBAI FOR ALMOST A DECADE REPRESENTING REVENUE IN 12,000 PLUS APPEALS WITH A FAIR DEGREE OF SUCCESS. HOLDS TWO MASTERS DEGREES INCLUDING AN MBA (SPECIALIZATION :HRD)FROM DELHI AND A MID CAREER MANAGEMENT COURSE FROM IIM AHMEDABAD. WORKING PRESENTLY AT MUMBAI IN FREELANCE PRACTICE OF I.T. LITIGATION AS WELL AS COMPLIANCE,ADVISORY,RESEARCH ,ANALYSIS AND DRAFTING.
The practice of abusive tax avoidance—often characterized by aggressive tax planning exploiting legal loopholes against the spirit of tax law—poses a significant modern challenge to stable governance and equitable societies. Though legally distinct from tax evasion, its intent and impact are destructive, leading to serious social and economic consequences. By draining public treasuries, distorting markets, and eroding institutional trust, abusive tax avoidance weakens the foundations of the social contract.
Its primary consequence is a massive deficit in public revenue. When corporations and high-net-worth individuals shift profits to offshore tax havens or use complex financial schemes, governments lose essential capital. This lost revenue impairs fiscal stability, forcing governments to increase tax burdens on compliant taxpayers, cut spending on vital services, or borrow more. In developing economies, revenue leakage can dwarf foreign aid, creating cycles of dependence. Tax avoidance also distorts competition, giving unfair advantages to large multinational entities over smaller compliant competitors.
The financial loss rapidly becomes social harm, worsening inequality. Education, healthcare, and infrastructure suffer first. When tax dollars disappear offshore, overall quality of life declines and equity gaps widen. Public perception of systematic avoidance by the wealthy erodes trust in democratic and legal systems. This institutional distrust leads to social discontent, lower tax compliance, and tolerance for corruption.
On a systemic level, abusive tax avoidance undermines global stability. Tax havens and opaque cross-border structures enable illicit financial flows, money laundering, and corruption, obstructing transparency in financial markets. Practices like treaty shopping create a race-to-the-bottom in tax policies, weakening sovereign revenue and shifting tax bases away from real economic activity. Ultimately, abusive tax avoidance fractures international cooperation, concentrates wealth and political power, and reduces the capacity of states to achieve development goals. Curtailing it is not just a fiscal challenge but a moral imperative for global equity and sustainable economic order.
The book “Taxing Colourable Device” by former Indian Revenue Service officer Anadi Varma circumnavigates this complex web from an Indian perspective, interspersed with global tax trends. It is of immense use to government tax agencies, tax law professionals, tax advisors, and law colleges. It addresses the latest and most threatening tax challenge decoded by the author.
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