TAX 1.2B THE TRIPARTITE PILLARS OF TAX
THE TRIPARTITE PILLARS OF TAXATION.
Every sound assessment of any issue in taxation is meant to be appraised from these three perspectives: tax policy, tax law and tax administration.
CREDITS: PROFESSOR ABIOLA SANNI
TAX POLICY: Policies are fundamental principles… the course of action which the government wishes to follow in ordering the tax regime. Countries are beginning to align their tax policies towards the requirements proposed by Adam Smith in Wealth of Nations[1](discussed above).
TAX LAW: This can be regarded as the legislative and judicial aspect of taxation. Law consists of diverse rules derivable from various sources like; statutes, cases and judicial pronouncements, etc. A cardinal rule of taxation is that there can be “no taxation without representation” this means that each tax imposed must draw its legitimacy from a written instrument which is valid and in force-Bill of Rights Act 1688, S.A.Authority V Regional Tax Board.
TAX ADMINISTRATION: Deals largely with the enforcement aspect. Enforcement should be efficient and responsive. The cost of administration should not be unduly expensive.
Explanation: We must base our criticisms and appraisal of the taxation regime from these three views. E.g. the government may ask you to advise it on the practicability of imposing 45% proportional taxation on all citizens. The first question to ask is “is this a sound “policy” that we would like to stick to?” the second thing to do is to examine the possibility of enacting the law (that would impose 45% tax on citizens[2]). The third step is to determine whether it would be possible to “administer” the tax and ensure compliance.
[1] Where he advocated that: equity, certainty, convenience and administrative efficiency must be features of a tax system.
[2] Remember that there would be certain issues raised here like: Whether 2/3rd majority of the legislature can agree to enact this, whether the President would assent to this and so on…
