Peter Jones

How ancient Athens beat tax avoidance

HMRC’s pre-payment plan has good classical precedents

issue 21 June 2014

The taxman will soon be ordering those planning dodgy tax avoidance schemes to declare them beforehand and pay the full tax on them up front. Only if HMRC finally decides the scheme is legal will the tax rebate be allowed. This is a very Greek principle, which could help with the problem of bankers’ bonuses.

The 4th century bc Athenian tax system was very progressive: only the richest paid any at all. In times of war, those with a certain value of declared property were liable for an emergency tax (eisphora), levied at 1 or 2 per cent. These wealthy Athenians — numbered in the thousands — were grouped into ‘tax partnerships’, and the state assessed what each partnership had to contribute.

As one might imagine, it was not easy to get the money out of them, especially since a number of reliefs against paying the tax was allowed.

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