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Discuss, with reference to relevant academic literature, how a tax system might be designed to combat avoidance and evasion.
Finance & Accounting
Pages 8 (2008 words)
Tax Evasion Name Institution The current economic structure of the globe is highly influenced by the emerging trend in the political environment that keeps realigning itself. This has lead to liberalization of most economies and open trade. It is worth to note that the increasing expenditure of countries arising from the exponential population growth strains government coffers.
Tax evasion and avoidance have become common and is raising concerns over the effective funding of government administrative functions. It is therefore imperative that the government develop strategies that would help it reduce the cases of tax evasion and avoidance as this is eating into the country’s financial policies. People who deliberately avoid tax by hiding their wealth and income tend to pose a great challenge to the society. In the country’s effort to adjust the economy and eliminate the balance of payment deficit, it is essential to detect and follow up tax evaders and ensuring that they pay up. The world is currently experiencing technologically-driven transformation in the way business is done. The private sector is a pioneer in technology application in daily business operation including honoring of tax obligations. It is therefore advisable that the government need to seek collaboration with the private sector to develop a workable technologically driven mechanism of curbing the tax evasion menace. One of the greatest challenges is the range of data available. The government need to formulate a legal structure that is able to capture the property and assets of various entities in the country so that it can easily close down on the tax avoiders. ...
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