In any event these “smaller offences” are more easily detected because the ATO has access to significant technology and is now in receipt of data from almost all financial institutions, fund managers and major companies. Consequently, the chances of cheats being discovered are very high.
Additionally, reviews by the ATO of social media, newspapers, awards of large tenders and similar information is performed almost daily. The information gathered from these sources is collated, indexed and always followed up. The minimisation of taxes is, however, completely legal, and you are within your rights to manage your financial affairs in such a way that you pay no more than the amount you are obliged to pay. Therein lies the distinction between evasion and minimisation in that evasion is attempting to pay less then you are legally obliged to pay, while minimisation is ensuring that you pay no more than that.
For instance, you may be able to claim life insurance and income protection insurance as a tax deduction against your income. You can check whether you are eligible on this online life insurance comparison website.
Tax in all its Varieties Not withstanding this minimisation can be detrimental if it lacks strategy and purpose. Deciding to work minimum hours or forego the additional earning opportunity, for instance with a mindset of “why bother to earn any more for the taxman…” will of course reduce the amount of tax you pay, but to what end at what sacrifice?
Minimising taxes in this manner is short sighted and oblivious to the greater opportunity, increased superannuation, increased borrowing capacity and increased investment opportunity that can come with a higher salary.
“I am not evading tax in any way, shape or form… Now of course I am minimising my tax, if anybody in this country doesn’t minimise their tax, they want their heads read because, as a Government, I can tell you they’re not spending it that well that we should be donating extra”. – Kerry Packer
Its difficult to argue with the logic and also with a man of his stature and success. While the landscape of Government and society has radically changed since Kerry Packer made that statement, the attitude it exhibits is still important. Speaking with a professional about your financial planning and insurances are vital to ensuring you that you build wealth successfully and according to the law.