Introduction to the Tax Laws

Tax law is the specific set of laws under which the government has a claim on taxpayers. The tax laws govern the complete taxation process of the country. This demands a certain portion of the income of trust, corporation, or individual, to be transferred. It can be the authority part of their property or income. The authority to levy taxes is commonly acknowledged as the right of governments. The taxation laws are different in different nations. Even though there are some similarities and general components in the laws of numerous countries.

In more simple words, a tax is the charge imposed by the government individual, trust, organization or corporation. This is levied on the income as well as the value of an estate or gift. There are so many other kind of taxes, such as, use taxes, value-added-tax, consumer sales taxes and real estate taxes. The prime objective of tax is to generate revenue for the government so that it can be put to the use for fulfilling the needs of the public. This is not at all the voluntary payment but an imposed contribution exacted according to congressional jurisdiction.

The Sphere of Taxation Law

In common, tax law only concerns the legal aspects of taxation. There is no association with economic, financial, or other attributes. There are multiple types of taxes and it also works with the common level of taxation, the rates of taxes, and the things that do not fall into the domain of tax law. Tax law lies within the public law domain. This means it creates the regulations that measures and restricts the actions and correlative interests of the members that are applying them and the political community. This is completely different from relationships among individuals. The entire thing lies within the sphere of the private law.

International tax law is for the management of the problems that occurs when the individual, organization or the corporation is liable to pay tax in multiple countries. The tax law can be categorized into material tax law. The interpretation of the legal requirements gives rise to the imposition of the tax. The formal tax law is the one that is concerned with the rules set down in the law for assessing, method, enforcing, coercive measuring, administration and constitutional application, and other such elements.

Administration of the Taxation Law

The executive power is responsible for administrating the tax law. The legislative power has the right to enforce taxes and to decide the conditions under which taxes will be due. The minister of finance, chancellor of the bank, and the secretary of the treasury in the central government are head administrators of the taxes. The actual power is usually distributed into the departments as there are so many different numbers of taxes. They even differ on the method and basis of the collection. In the majority of countries, there are three main branches for the ministry of finance. They are entrusted with the levying of taxes. One is responsible for the collection of income taxes. The second on imposes taxes on the transmission of goods. This also manages legal transactions such as inheritance taxes, stamp fees, turnover taxes, and registration dues. The last one is responsible for the collection of excise and customs duties. There are commonly three successive phases for imposing of taxes:

(1) Estimation, or the meaning of the specific amount subjected to taxation under the enactment;

(2) Estimate or calculation

(3) Implementation.

Computation of the Taxes

The second stage is concerned with imposing taxes on the calculation of the amount that should be paid by the taxpayer. According to the American self-assessment process, the taxpayer himself is liable for the primary establishment of the income tax. This is method works on the basis of the rule. The liability of the tax stated on the return applications gives details about the tax on the record basis. In some cases when the tax administration finds out that extra tax is due, they immediately issue the deficiency statement. Practically, the countries that are imposing the income taxes demand withhold on the salaries and wages of the taxpayers.

In some cases, the delayed tax liquidates the liability of the taxpayer. There are no obligations and opportunities to register the tax return. Some of the countries also provide the facilities for the prepayment of the reserved tax on earnings and other kinds of income coming from the personal property. The setup of the “pay-as-you-go” policy works best for the professional income.

The taxpayers are responsible for the calculation of all these provisional amounts. On an optional or compulsory basis, the taxpayers are liable to make the advance payment of complete or part of the income tax before the return is filed. This can be done on the basis of either the taxable income of the past year or expected income. It is the major facility that is also provided in some countries. However, generally, the final computation of taxes imposed on inherited property, income, and the property transfer is handled by the tax administration. On the other hand, the value-added tax and sales taxes calculated by the taxpayers themselves.

Enforcement of the Taxes

The accountable tax office volunteers the collection of the amount due when the taxpayer fails to pay the tax within the legally stipulated period, or in a very little time later. When it comes to the actions against the taxpayer, the tax department is not in the state of the common creditor prosecuting a common debtor. The law bestows one privileged position on the tax administration with the creditors of the taxpayer. The interest charges are also applicable on the amount due. The law has made multiple kinds of measures to ensure payment. The extreme penalties consist of a fine. This is added by the collecting agent exactly when law terms are violated.

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Topic revision: r1 - 17 Jul 2020, BookMyEssay
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