Ongoing Trend of Tax Avoidance, Factors Affecting Tax Rates Setting, How Companies Deal with Taxes - Term Paper Example

The paper “Ongoing Trend of Tax Avoidance, Factors Affecting Tax Rates Setting, How Companies Deal with Taxes” is a convincing example of a finance & accounting term paper. Tax refers to a compulsory contribution to the revenue of the state (OECD, 2012). It often comes from worker incomes, profits from various businesses and corporations, or is added to the cost of transactions, goods, and services. The subject of tax has become quite a controversial topic in many countries. The controversy comes from the differing opinions among policymakers, tax practitioners, economists, and the average citizens on aspects of tax like how much the government should collect and who should shoulder the heaviest tax burden among the taxpayers. In fact, perhaps the only aspect of tax that most people universally agree on is the fact that governments must collect it.

Every tax administration, the government department concerned with the collection of taxes, has three broad objectives. The most important objective of collecting taxes is to generate revenue for the public sector. However, other secondary objectives are to avoid obstacles for economic growth, avoid the problems caused by the cyclical volatility of economic conditions, and for the improvement of equality through redistribution of wealth and resources (Brügelmann, 2012).

Tax regulatory bodies implement their objectives through the provision of the following general services. Tax regulatory bodies offer registration services. Tax regulatory bodies collect, store and maintain the basic information for taxpayers. It also helps them understand the taxpayer base and plan for the future. They offer taxpayer services, including forms, information, and tax education. Tax information helps the taxpayer comply with obligations. This demonstrates the fact that the tax administration cares about its customers. It also reduces the need for enforcement in cases of default, especially in situations where resources are limited.

They process filings, payments, and declarations. They process the forms and processes designed for the taxpayers to file their returns and pay their liabilities. They also provide taxpayer audits, which are ways of monitoring compliance with the rules. They review the filed returns and information to make any additional assessment and take action for collection.