Tax Administration Good Governance

There is no doubt that tax administration is a complex matter. It is institutionalised by a governance framework which is strongly influenced by legal traditions, state governance approaches, historical developments, and norms and values of society. While there are many common aspects of national tax administration frameworks, there is no single governance framework that applies everywhere. Questions such as the degree of autonomy granted to a tax authority and scope of discretionary powers need to be evaluated in the light of existing dysfunctionalities in governmental institutions, scale of political interference in public administration, and the system of ‘checks and balances'.In daily life, the efficiency and effectivity of the tax administration is impacted by rapid changes in its operating environment, and by the nature of the relationship the between tax authority and taxpayer. To deal with the effects of globalisation and IT developments, tax authorities increasingly rely on voluntary compliance by taxpayer. Internationally, several measures have been developed and implemented to enhance voluntary compliance, including compliance programs as well as reporting requirements. Additionally, benchmarking tools have been developed to measure tax administration performance and to identify good practices.The recent developments in the fight against tax evasion and aggressive tax planning push the boundaries of tax administration and challenges its capacities. At the same time, these developments create uncertainty for businesses in the application of tax law. At the end of the day, the practical meaning of any tax law provision is greatly determined by the manner how the tax authority administers it and enforces it