Taxation Essay Example | Topics and Well Written Essays - 1500 words

Taxation - Essay ExampleIn implementing the principles of task efficiency, it adheres to fiscal neutrality in the sense that the tax remains is implemented much(prenominal) that it does not interfere with the workings of the markets or the decisions of the households while minimising the disincentive effects of government taxes on he level of economic activity. Subscribing to the perspective of the OECD that an efficient tax system is achieved via a mix of different taxes, the UK tax system combines various types of taxation to promote taxation efficiency (UK Parliament, 2011). Another important insurance key on which the UK taxation system rests is fairness. According to the UK Parliament (2011), this means that the saddle of tax should reflect the ability to comprise while incorporating principles of intergenerational equity. A defensible panache of interpreting the policy declaration is that the UKs tax policy is governed by equity taxation which bum be extended to mean th at taxation can be used to promote equity. The UKs notion of equity, however, covers the promotion of social and intergenerational equity. This means that equity across social groups is promoted (without promoting disincentive to work and do business) as well as intergenerational equity. ... It is a standard notion in economics that horizontal equity means that those who earn the same should have equal burden of the tax while vertical equity means that those who earn more should sh ar a higher burden of the tax those with the same ability should pay the same tax and those with higher abilities should pay more taxes. The UK Parliament (2011) also emphasised that in promoting fairness in taxation requires that the UK government create policy measures that prevent tax avoidance and evasion. Finally, another important reason given by the UK Parliament on why the government of the UK imposes taxes is that people must drag value for their money. This is interpreted to mean that the UK ta xation is designed and people are taxed in a manner that compliance and collection costs are marshalled to a minimum (UK Parliament, 2011). In sum, based on the UK Parliaments publication, the core principles of the UK governments tax policy are sustainability, efficiency, fairness and value for money. The quatern principles provide the basis as well as the reasons on why a certain tax policy is adopted and the manner by which a tax policy is implemented. At the same time, the articulation of the four principles should not obscure a fundamental fact the main aim of the tax system of the UK is to raise revenue (UK Parliament, 2011). The UK Parliament (2011) publication declared that if tax policy is used to support other objectives then it should be interpreted as an campaign by the tax system to produce the best value for money. With the ongoing global economic difficulties that are believed to have originated from the United States sub-prime crisis of 2008, UKs taxation policies are also