The Elgar Guide to Tax Systems

The Elgar Guide to Tax Systems

Elgar original reference

Edited by Emilio Albi and Jorge Martinez-Vazquez

Tax systems have changed considerably in the past three decades. These fundamental changes have been the result of economic globalization, new political stances, and also of developments in public finance thought. The chapters in this volume offer a critical review of those changes from the perspectives of tax theory, policy and tax administration practice, and the political economy of taxation. The authors also consider what sort of reforms are worth undertaking in tax policy design, tax administration and enforcement, and the assignment of sub-national taxes.

Chapter 10: The Administration of Tax Systems

John Hasseldine

Subjects: economics and finance, public finance, law - academic, tax law and fiscal policy, politics and public policy, public policy


John Hasseldine* 1 INTRODUCTION Adam Smith established that there were four primary principles in relation to tax systems. The world in general, and that of taxation, has become far more complex since, yet tax administrations still need to pay heed to these principles. Naturally, in both tax reform and administration, this is easier said than done. There continue to be budget pressures on tax administrations with an increased focus on performance measurement and evaluation, efficiency audits and enforced cost savings, public performance reporting and more scrutiny to governance and oversight mechanisms (in terms of governance or new governance structures. Effectively, ‘new public management’, as outlined in Flynn (2007), has ratcheted up the level of accountability from tax administrations and their leaders. These essentially external pressures coupled with features of the environment for taxpayer (non)compliance create huge challenges for senior management. So, while senior management in tax agencies are no doubt well aware of these trends, in the scholarly tax literature, there is relatively little recognition of these forces by tax researchers, although there are some obvious exceptions especially with respect to developing countries (Bird and Casanegra de Jantscher, 1992; Bird and Zolt, 2008) and by those calling for further cross-disciplinary research (Alley and Bentley, 2008). The purpose of this chapter is to address the recent evolution of tax administration, evaluate the current situation and conjecture on future best practice. In the next section, Gill’s (2003) framework is used to classify possible areas within which best practice can be examined...

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