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Tax Avoidance OR International Accounting Standards
Finance & Accounting
Pages 15 (3765 words)
A Critical Analysis of the Concept of Tax Avoidance and an Assessment of the Popular Trends in Tax Avoidance in the UK Corporate Sector & the Role of Stakeholders. Chapter 1: Introduction There are two main categories of taxes (Blankson, 2004). These are the personal taxes and corporate taxes.
Thus, they maintain a liberal tax system for businesses and maintain a more stricter tax system for individuals. Due to this, most businesses have many options of manipulating tax law to their favour in order to pay less taxes. In principle, taxes are paid to promote social justice and assist the government and corporate sector to meet its objectives and needs. If an individual or business entity fails to pay taxes, they are liable to prosecution and this could result in fines or jail terms (Blankson, 2004: 3). This implies that although failure or refusal to pay taxes could have serious consequences, there are some kind of loopholes which can be explored by corporate entities in order to pay less taxes. The ACCA identifies that everyone must arrange his affairs to pay less taxes and it is not even a patriotic duty to pay more taxes (2009). This means that it might be desirable to arrange one's affairs to pay the minimum tax possible. James identifies that “tax avoidance involves the taxpayer using the tax rules to his best advantage to minimise his tax liability” (2009: 129). Hence, the practice of tax avoidance entails the examination of the tax rules to identify the best way of arranging one's affairs to pay the least possible taxes. However, this theory seem to be in conflict with the normal view and spirit of taxation which is to promote social justice. ...
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