A Good Tax System: A Rapid Review

Abstract

This volume emphasised essential underpinnings comprising principles of taxation in tax design. Conversion to a comprehensible legal format that can be correctly interpreted by stakeholders is equally important. Increasingly, tax avoidance by multinational enterprise (MNE) taxpayers represents a formidable challenge to tax administrations and a new branch has developed that addresses this issue. Not only are taxation theory and law important, but its administration represents a third anchor for taxation to be successful in a country and an international context. Further, this volume has illustrated an important lesson in taxation, that of its history, taking India as a case study. It found that taxation has had an extractive characteristic over the course of history rather than one of willing participation in a social contract between the government and the people it should serve. Historical experience is a lesson for what modern governments should eschew in designing tax systems and administrations to achieve voluntary tax compliance rather than using severe extractive policies merely for revenue generation. This chapter comprises a rapid review of the major elements of an ideal tax design that a student of taxation should keep in mind when designing tax policy, writing tax law or administering a tax system.