What makes a good tax system?
Here are some hallmarks: It has a clear purpose: • Raises revenue to fund public expenditure • Balances the budget (over a period of time) • Meets social objectives • Improves human development It is strategic: • Stable and consistent, enabling long-term business investment • A fair value for natural resources • Encourages international trade • Encourages change in behaviour which society is agreed upon It is coherent and efficient: • Minimises the administrative burden • Clear and understandable rules • Consistent with wider (non-tax) law and international principles • Consultation on policy and administration It is fair and transparent: • Based on law rather than the whims of tax authorities • Consistently enforced • Independent and effective route for resolving disputes with the tax authority • Mutual trust and respect between taxpayers and the tax authority
