Cause Of Tax Evasion

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CHAPTER 1: INTRODUCTION 1.1: TAXATION Oliver Wendell Holmes, Jr. said: “Taxes are the price we pay for civilization. More specifically, taxes are the price we pay for the Canada we love. This means that for a country to attain civilization, there must be tax rules in place”. “Cooley defines taxation as the process or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of government. Expressed in another way, it is a method of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must, therefore, bear its burdens” (Lawgiants.com). It has been argued that it is impossible for a country to run its affairs without taxes. A country’s existence…show more content…
The Organisation for Economic Cooperation and Development (OECD) has defined tax evasion as “A term that is difficult to define but which is generally used to mean illegal arrangements where liability to tax is hidden or ignored i.e. the tax payer pays less tax than he is legally obligated to pay by hiding income or information from tax authorities” In case of tax evasion deliberate steps are taken by the tax payer in order to reduce the tax liability by illegal or fraudulent means. Tax avoidance, on the other hand is defined by the OECD as “term used to describe an arrangement of a tax payer’s affairs that is intended to reduce his liability and that although the arrangement could be strictly legal it is usually in contradiction with the intent of the law it purports to follow”. The key distinction being that in tax avoidance the key facts or details is not hidden by the taxpayer but is on…show more content…
The impact of GAAR would be evaluated through secondary research i.e. desk research. India has been selected as the country for the case study because it …… 1.4: OBJECTIVES OF THIS STUDY The main objective of this project is to identify the Anti Avoidance rules in India and the need for it. This research also aims to identify the current GAAR rules in India, the evolution and latest developments with regards to the implementation of GAAR in India. This research will also evaluate the impact of GAAR in India on investors and the Indian economy. Upon evaluating the impact of GAAR in India, this research would also make recommendations as to the best way to implement GAAR successfully. 1.5: LIMITATIONS TO THIS STUDY In the course of writing this project, some difficulties will be encountered which might create a challenge in carrying out a proper evaluation of the impact of GAAR in India. These include the Delay of GAAR for two extra years before implementation in India, limited access to articles for the literature review chapter, taxation in general is viewed differently across the world therefore there will be different view points on issues around it to cover and it will be near impossible to take all the views into consideration and this study is carried out in the U.K but case study is abroad

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