A construction of the fundamental principles of taxation

Abstract

The importance of considering Taxation1 a specialised field of study is often ignored because people assume that taxation is already adequately dealt with in other disciplines. It is therefore imperative to identify or construct the Fundamental Principles of Taxation to establish Taxation as a specialised field of study for the purposes of research and education, and to inform the practice. The theory of the discipline of Taxation encompasses the most basic principles required to comprehend Taxation. By contrast, taxation policy addresses the practical arena of taxation, including the collection and spending of tax revenue, as well as citizens contributions. Bearing in mind the many nuances of taxation, their possible roots and their relevance in practice, education and research, this study asked the following question: What are the Fundamental Principles in Taxation that are essential to Taxation internationally both in the present, and as Taxation evolves into the future? The aim of the study was to construct Fundamental Principles for Taxation. A multi-method qualitative research design was chosen, allowing the triangulation of three sets of findings. This multi-method design allowed the limitations of every data collection method to be offset by the strengths of other methods. The research design provided depth to the picture of the phenomenon of interest, namely the Fundamental Principles of Taxation. The first data collection strategy was an extensive historical review (Method 1). This method was supported by a thematic analysis using Atlas ti of the aspects of taxation history that were identified. The second method was an Interactive Qualitative Analysis, a systematically executed focus group activity conducted with international experts on Taxation (Method 2). The third method was the presentation of a single question to international Taxation experts to elicit written responses (Method 3). A thematic analysis of their responses was conducted using Atlas ti. Three sets of taxation principles emerged from these discrete analyses. These sets of principles were then triangulated to achieve a synthesis to answer the research question: What are the Fundamental Principles in Taxation? The process of triangulation led to the construction of six Fundamental Principles of Taxation. Each was supported by a rich description, compiled as an outcome of the analysis. The six principles are achieving (i) Efficient and effective administration and communication, (ii) Certain, neutral, understandable legislation, (iii) Equity influencing different levels of society, (iv) Taxpayers duty to contribute to society versus the government s duty to find a balance between taking too little and taking too much, (v) Benefits to the public through taxation, and (vi) Changes to unwanted social behaviour. The application of Taxation is still evolving in terms of Taxation s interdisciplinary role in the international economic and socio-political arena, where tax policies are made and tax systems are implemented in the unique circumstances of every country. Future research will draw more countries into the discussion and include more disciplines in an attempt to adhere to the true interdisciplinary nature of Taxation. Against this background, a tentative universal set of Fundamental Principles of Taxation was constructed and proposed.