3 January 2018

International Co-operation and Tax Administration Division


Dear Ladies and Gentlemen,


        Circumvention of Common Reporting Standards (CRS)


May I respectfully suggest that the OECD has set itself an impossible task in endeavouring to curtail circumvention of common international reporting standards.

Just as national accounting and legal professions have proven to be extremely creative in seeking to reduce or avoid their clients’ payment of income tax, it has been proven they will also find ‘clever’ means to reduce or avoid payments internationally.

Additionally, some countries will be found unwilling to partake in CRS.

Whilst your current effort remains worthy and earnest, history has proven the efficient and fair taxation of income is so fraught with insoluble issues that the OECD is seeking CRS to perform ‘the impossible’.

There were very good reasons, for the sake of practicality, equity and unavoidability, why the likes of Adam Smith, David Ricardo, John Stuart Mill, Thomas Paine and Henry George argued that land rents, not incomes, need to be taxed away. In fact, the following equation adapted from the official outline in “Australia’s Future Tax System” demonstrates that if unearned economic rent is captured for public purposes, the taxation of labour and capital is unnecessary:-

Yt – rRt = wLt + iKt

Where land (R), labour (L) and capital (K) are the factors of production, and their respective factor incomes are rent (r), wages (w) and interest (i) for a given time period (t). (Y) represents the national income.

The adequacy of rent has been proven by professors Mason Gaffney (ATCOR) and Joseph Stiglitz (The Henry George Theorem), so it is arguably the unavoidability of taxing economic rent which has seen the tax-avoiding 0.1% consign it to an afterthought in taxation considerations.

Yours sincerely,

Bryan Kavanagh AAPI