Western governments are becoming increasingly aggressive about their tax-collection methods in an effort to reduce escalating fiscal deficits from economic stimulus packages, says Vern Krishna, Tax Counsel, Mediator and Arbitrator in the Ottawa office of Borden Ladner Gervais LLP.

In Canada, the Canadian Revenue Agency is investigating secret bank records in Lichtenstein and Switzerland, after former employees of banks in both countries stole computer data and turned it over in exchange for financial payment and whistle-blower compensation. However, “using stolen information for prosecutorial purposes raises complex evidentiary issues,” says Krishna.

In order to avoid costly and time-consuming investigations, many governments including Canada are offering amnesties to “induce the wrongdoer to financially confess his or her sins in exchange for a more gentle whipping,” says Krishna . “Amnesties are easier to administer and can bring in additional revenues to the treasury at minimal cost.”