The tax system is an effective instrument of public policy

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The tax system is a set of taxes and fees that are levied on business entities and ordinary citizens in accordance with relevant legislation (for example, the Tax Code). The need for its existence is due to functional state tasks, and the stages of development depend on the historical features of the evolution of statehood. In other words, the organization and structure of the tax system should characterize the level of statehood of the country and the development of its economy.

Construction principles

The tax system is a set of revenues collected to the budgets of various levels, the construction of which is carried out on the basis of certain principles in accordance with the Tax Code and the Constitution of the Russian Federation. The domestic tax system is characterized by a three-level type, which implies division into federal, regional and local taxes. This type is consistent with the world practice of various federal countries.

As the main principles of the tax system, special attention should be paid to the following:

- each person must pay taxes and fees on time;

- taxes are not discriminatory and cannot be applied in different ways based on racial, social or religious criteria;

- differentiated rates do not apply, as well as certain benefits based on the form of ownership, place of capital formation or citizenship;

- Arbitrariness in determining the amount of tax payments is not allowed.

Taxation and tax system

The effectiveness of any tax system must be ensured by compliance with certain requirements, criteria and basic principles of taxation:

- justice, assuming uniformity and proportionality in the distribution of taxes among citizens;

- certainty, which consists in the exact determination of the amount, method and time of payment;

- convenience: tax is collected at the most convenient time and in the most convenient way for the payer;

- savings, which means reducing the cost of collecting taxes.

These principles were formulated back in the 18th century by A. Smith.

Functions of the tax system

This system serves as a government mechanism for the redistribution or distribution of income, which are determined by its functions.

So, the tax system is a tool that contributes to the formation of the revenue part of the state budget spent on various needs of the country, expressed in the maintenance of the state apparatus, the army, science and technology, education, orphanages, he althcare and the environment. The factors listed above are an expression in the tax system of the fiscal function.

The tax system is an effective instrument of economic regulation of the state, manifested in the impact on social reproduction, due to the introduction of certain restrictions or the implementation of simple control of certain processes. Thus, in this manifestation of the tax system, we are talking about its economic function.