The Treasury will spend £900m on new measures to raise the money from people who at the moment are avoiding paying their fair share of tax, he revealed in a speech.
The extra funding will pay for the creation of a dedicated team of investigators to crack down on off shore tax evasion. There will be more investment in technology to prevent alcohol and tobacco smuggling and specialist cyber crime teams and online specialists to investigate tax crimes. A more robust criminal deterrent against tax evasion is also planned.
Alexander announced the new measures in his speech to the Liberal Democrat autumn conference in Liverpool on Sunday.
He said: “We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra. Tax avoidance and evasion are unacceptable in the best of times, but in today’s circumstances it is morally indefensible.”
The measures include a fivefold increase in prosecutions against tax evaders, rooting out 50p rate dodgers and a crackdown on hiding money offshore.
The government estimates the move will bring in an extra £7bn a year in tax by 2014/15.
The extra £7bn in tax is equivalent to the total income tax and national insurance paid by more than one million people on median incomes, Alexander claims.
He added: “Just as it is right to ensure that every benefit claim is fully justified, so we must ensure that every tax bill is paid – in full.”