Taxpayers will try almost anything

With yet another crazy tax year just finished, Julian Lewis files his annual tax return and discovers that it was good news for strippers in Europe but not so good for tax evaders in India.

WHILE most of us idly ponder whether the new lower income tax rates that apply from July 1 will be enough to pay for the inevitable increase in our accountant's fee, there were taxpayers (and dodgers) from around the world last tax year who had tax issues of a very different nature.
For example, when a Norwegian appeals court ruled that striptease was an art form - a form of dance combined with acting - and should be exempt from value-added tax (their GST), the news spread quickly to Amsterdam.
The owners of the Diamond Go-Go Bar in Oslo refused to pay VAT of 25 per cent on entry fees on the basis striptease dancers were stage artists like sword-swallowers and comedians, deserving of the same status.
A Dutch judge wholeheartedly agreed. He ruled peep shows, where sex workers performing strip shows and explicit acts could be watched from booths (even by judges, should they wish, presumably), were a form of theatre, entitling club owners to a tax break.
"Admitting customers to peep shows is equivalent to admitting them to a theatre performance," stated the ruling, adding that: "The erotic character of the performance does not diminish that."
Tax authorities in India used the art form for a different means.
In the Indian state of Bihar last year the cash-strapped government decided to collect overdue tax revenues of around $14,000 by employing bands of singing eunuchs gaily clad in saris to sit outside the homes of tax defaulters.
The eunuchs, feared by many in India, were paid a 4 per cent commission on any tax collected and staged sit-ins and beat drums outside the homes of tax defaulters. According to reports, exceptional results were gained within 48 hours by this unusual method.
This could give Australian authorities something to work with if they wanted to cut costs and speed up Operation Wickenby, Australia's biggest-ever tax evasion crackdown.
Last year it was estimated Wickenby would bring in $323 million over the next four years, the amount of lost revenue from high-profile Australians using offshore trusts to avoid tax.
But given the investigation will cost an estimated $300 million to run, it will only do slightly better than break-even. A eunuch solution could be called for.
Romania, meanwhile, faced its own unique tax problems.
For every officially registered witch in Romania - one, in fact - who registered to pay tax on her services, there were another 4000 or so whose tax-free spells were costing Treasury millions.

Services including star-gazing, fortune-telling and talking to the dead are big business in Romania. So is vampirism, spells, hexes and curses, with companies known to consult the experts.
Witches even had a stand at a recent export fair. But as of last year, only Gabriela Ciucur, who sees up to seven clients a day and charges about $15 a session, was giving official receipts and toeing the official taxation line, leaving authorities to consult their legal crystal balls to gather details of witches and their incomes.
Not that they were allowing authorities to sweep them off their feet, or even their brooms.
Maria Campina, 57, the self-proclaimed White Magic Queen and leader of the Romanian witches, said: "Why should we pay taxes when we don't get anything from the state?
"We already do a lot for our country. Whenever there is an important Christian celebration, we perform a ritual to protect the country from natural disasters.That has to be worth more than any tax income."
But while Romanian tax authorities were ducking any potential curses, China's tax office launched a drive last year to persuade the 1 million people estimated to earn more than $20,000 a year to pay income tax.
Not surprisingly, there were not that many takers, with only 3000 volunteering, and almost half of those living in Beijing.
China Central TV, in its coverage of the tax office's disappointment at the poor response to its appeal for extra taxpayers, said that in some cities not even a single person had registered to pay.
Not surprisingly, only 7 per cent of China's government revenue comes from personal income tax.
Another Chinese tax-raising idea had a very different result, though, after city authorities in Zhangzhou, in China's southern Fujian province, decided to give the children of high-taxpaying parents bonus points in their public exams.
This, as you would expect, caused outrage in Zhangzhou where, as elsewhere in China, there is a ferocious battle for access to the best schools.
And given most people in China pay no income tax, with the amount of income declared for tax purposes commonly viewed as negotiable, big taxpayers are regarded as unusually generous and public-minded.
Income tax may be negotiable to some extent in China but in the Philippines it can literally be a raffle.
For there, in another innovative tax-raising idea that would appeal to many Australians, every time you send in a valid tax receipt it becomes an entry in a lottery that could easily be promoted here as Taxlotto.

And if your receipt is one of the five lucky ones picked out, you become an instant millionaire. And even if a million pesos is only worth about $25,000 in Australia, it will still get you well ahead of the pack in a country where about half of the population lives on about $2 a day.
Of course, some have little sympathy for the poor and blame the tax system for their troubles, such as the owner of an upmarket antiques shop in New York who early this year filed a $US1 million ($1.16 million) lawsuit against a tramp living on the footpath outside his shop.
Accusing the man of deterring customers by "performing various bodily functions such as urinating and spitting" on one of the world's priciest retail strips, he said the homeless man was blocking his lavish window display, then featuring a $26,000 19th-century mahogany bench.
Defendants of the homeless man, who huddled over a warm grate in front of the shop, said he had the same right as anyone else to occupy the public space.
And why is tax involved? Because the owner says he has spent two years trying to get the homeless man to move and, although he has called the police, they refuse to intervene on the grounds that the man is doing nothing illegal, leaving the owner to say: "I pay taxes in New York City and some of that is to maintain decent shelters. He should take advantage of that."
But if all this tax business is too much to handle, perhaps you should consider buying a tax haven, such as the one for sale earlier this year.
You might need more than just the money because a helicopter or boat is required for access to Sealand, a former World War II fort in the North Sea.
Settled 40-odd years ago, and declared a state with its own self-proclaimed royal family, the tiny principality began life as Roughs Tower in 1941, a 550sqm steel platform stuck on top of two concrete towers about 11km off the coast of Harwich, in eastern England.
Inviting offers of eight or more figures for the property with uninterrupted sea views, complete privacy, and a status as a tax haven - it is beyond the three-mile (4.8km) limit of Britain's waters - the family who have occupied Sealand since 1967 have fought hard for their disputed nation status.
Former British army major Paddy Roy Bates declared it a state in international waters when he occupied it with his family and dubbed himself prince.
The Royal Navy tried, unsuccessfully, to evict him and Roy, as the naval forces entered territorial waters, fired warning shots from the former fort. After a judge ruled in his favour that Sealand was outside UK government control, in 1974 Roy introduced a constitution, a flag, a national anthem, currency and passports.

When Dutch and German businessmen visited Sealand in 1978 to discuss a business deal, they attempted to kidnap Roy's son but were overpowered and held as prisoners of war.
For such are the powers of having your own fort, tax haven and nation.
For the rest of us, who have to make do with the little luxuries of life, such as listening to Elvis Presley's recording of Teddy Bear or visiting a teddy bear display in Somerset, England, there is no escape from the taxman.
A dog employed last year to guard the collection - that included a valuable Steiff bear named Mabel from 1909 that was once owned by The Pelvis himself - went berserk and inflicted fatal damage on some of the exhibits.
This included the aforementioned Mabel, who lost a 5cm lump of fur from her stomach and had her head all but severed, incensing her owner who had paid $100,000 for her at an auction in, where else, Memphis, in the belief she had once belonged to Elvis.
And the tax connection? Barney the guard dog was a Doberman Pinscher, a dog first bred by a German tax collector around 1890 to protect him from his clients.
May neither you, nor your accountant, nor even your tax assessor ever have such a need. For tax, like everything else in life, is negotiable - sort of.