In the first place, it is imperative that we never forget that the law controls any and all taxes that are imposed. Now, to provide a response to your question, I will list below some characteristics that are shared by the majority of the tax laws that I have come across throughout the course of my tax career. For legislation to have any chance of being implemented successfully, they need to at least address the following questions:
What is the extent of the tax head’s jurisdiction?
Any tax head, whether it’s a value-added tax, a tax on income, a tax on structures, or anything else, is applicable within the parameters set by the legislation (e. g: the income tax law needs to specify what kinds of income are taxable and possibly what types of income are exempt).
What particular occurrences or circumstances give rise to the need to pay taxes?
This is self-evident. When the customs import declaration made by the importer (via his or her clearing agent) is confirmed by the customs office, for instance, the import duties become the responsibility of the importer at that moment. This is the case in some countries.
How much will the total cost be?
The legislation has to be amended to make it clear how the amount of tax that is owed is to be computed. For many different tax heads, the law specifies both a base and a rate that should be applied; for other tax heads, a flat sum is specified, while for other tax heads, the rate should apply on a defined unit, etc.
Who has the authority?
The legislation has to be amended to make it clear who is responsible for paying the tax. This might be the person who is responsible for paying the tax (for example, corporate income tax), but the legislation could also identify someone else if there are opportunities to reduce the amount of money spent on tax administration.
When is the payment of the tax due?
The legislation is going to have to specify the dates by which the tax return has to be submitted to the government entity that collects taxes.
How is the required tax payment made?
The legislation specifies the procedures that must be followed in order to comply with its reporting and payment requirements. The technique of voluntary self-declaration is selected by governments the vast majority of the time. In the majority of instances, the taxing agency is granted the authority to choose the form that is utilized as a tax return.
What are some additional components that must be present to guarantee the consistent and orderly application of the law?
Sanctions, special treatments, and other options are always outlined in the tax code in the event that compliance is violated.
How are disagreements and communications on the provisions of the tax law resolved between the taxing agency and the individuals who are subject to the law?
In many countries, these issues are addressed in a distinct procedural tax law that covers a wide range of tax heads (with each tax head being handled by unique legislation that is referred to as “the substantial law” and includes the characteristics stated above).
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