Question

Which of the following statements is incorrect?

• A. Tax planning promotes professionalism and strengthens economic conditions
• B. Tax planning is within the legal purview
• C. Tax evasion is a legal offence which may result in prosecution
• D. Tax avoidance is unlawful

Hint:

Tax planning and tax avoidance are legal, but tax evasion is illegal. Never confuse avoidance with evasion.

Answer 1

The Correct Option is D

Step 1: Definitions.
- Tax planning: Legal, promotes efficiency
- Tax avoidance: Legal, minimizes tax liability within legal boundaries
- Tax evasion: Illegal
Step 2: Identify incorrect statement.
The statement “Tax avoidance is unlawful” is incorrect