I would appreciate guidance on the particular
issue of the morality or otherwise of legal tax avoidance. It is generally accepted that avoiding tax by illegal means (e.g. through lying, deceiving or cheating the tax authorities) is sinful and the New Catechism has stated this. It would seem from this that legal tax avoidance, including the exploitation of tax law loopholes (since the amount of tax to be paid in a particular situation is no more or less than what is prescribed by the tax law) is not explicitly stated to be sinful in the New Catechism . However, I recall reading in the catechism promulgated by the Bishops of England and Wales in the early 1980s that inequitable forms of legal tax avoidance were also sins against justice and requiring restitution. This is a very relevant topic in the Ireland of today and any guidance or elaboration would be most helpful.
Wishing you well,
Thanks for your question on the morality of legal tax avoidance. We gave your question to a moral theologian, not feeling competent or experienced to reply to it ourselves. Here is what he wrote. It is very brief, and I hope it throws some light on the subject.
"1. Tax evasion by illegal means is obviously wrong, though there is a tradition which regards it as a matter of "penal law" - i.e., not morally obliging except in the matter of paying the penalties that may be imposed if one is found guilty.
2. There is a general moral obligation in distributive justice to pay one's fair share towards the upkeep of the community. This general moral obligation is determined - translated into figures - by the civil tax laws. Availing of loopholes in this is not necessarily immoral so long as one is not doing so to avoid accepting one's fair burden to a notable extent."