6 Things Tax Reform Activities Should Aim For
All over the world, people talk of tax reforms and governments outline steps that they are taking to improve there tax systems
. But how can one measure what a good reform agenda should be when it comes to tax reforms?
Here are five things that every taxation agency must pursue when it comes to instituting tax reforms.
1. Making The Collection Process Economical
One of the most important principles that any tax reforms agenda should seek to achieve is making the process more economical. This means that the administration cost and the cost of enforcing the laws and the regulations regarding taxation should be kept at a minimum.
2. Aiming For Simplicity
Another goal that tax reforms should seek to attain is the making the tax collection process simple. Many taxpayers usually complain that filing tax returns is usually quite hard task. The main reason for this is basically because the taxation authorities always seek to employ semi-legal jargon in order cover any loopholes that taxpayers might use to avoid or evade taxation.
3. Equity In Taxation
Apart from making the process economic and simple, the aim of any tax reforms should be to create equity in the tax payment system. This means that different people earning the same amounts of income should pay the same amount of income. At the same time, those people who are earning different amounts of income should pay different amounts of taxes, regardless of the sources of income.
4. Convenience Of Payment
Creating a convenient system of paying taxes should also be in the agenda of any reforms activities. In the many countries, paying taxes is not such a hard job. Even in developing countries, many people are now able to pay their taxes through more means than were able a few years back. All these things are products of reforms. Therefore, now that you can fill your returns and even pay your taxes through the internet with your credit card, you should not take it for granted.
5. Certainty Of Payments
Tax reforms should also aim to create certainty in the payment of taxes. This means that the taxpayers should always know when taxes should be paid and how they should be paid. This is not a problem in many of the countries with stable governments. In many of the countries around the world, there is always a set date by which taxes should be paid.
6. Neutrality
Unless it is the deliberate job of the particular tax, its effect should not be such that it influences the decision of a person whether he should engage in a particular trade. However in some cases, excise duty which is imposed on certain activities or products is usually designed to discourage the consumption and production of certain goods and services such as tobacco, alcohol, and so on.
Although the goals or objective of any formal taxation reforms may not necessarily be the same or clearly spelt out as in these cases, they are usually similar to these. As reforms continue, effort must be made towards perfecting the systems.
by: David de Souza
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