The Delicate Balance: Tax, Discretion and the Rule of Law

This book explores the tension between the legitimate needs of revenue authorities to exercise a degree of discretion and the equally legitimate rights of taxpayers for that exercise of power to be governed by the rule of law.

Why this book?

Few aspects of revenue law generate stronger feelings than the exercise of discretionary power by tax administrations. A delicate balance often needs to be struck between the legitimate needs of revenue authorities and the equally legitimate interests and rights of taxpayers. On the one hand, the executive and administration need to have sufficient capacity to apply the law; on the other, there is a need to maintain the principle of the rule of law that it is the elected legislature, and not the executive or tax administration, that establishes tax burdens. The chapters in this volume explore that delicate balance.

The Delicate Balance - Tax, Discretion and the Rule of Law considers the critical questions that arise from the intersections of tax, discretion and the rule of law in modern common and civil law jurisdictions: What do we mean by tax discretion and how does it vary in conceptual and practical terms in different tax regimes? What role should discretion play in tax systems that operate under the rule of law and how large should that role be? What are the legal, political, institutional and other constraints that can prevent abuse of discretion? To what extent can, and should, the legislature safely delegate discretionary powers to tax administrations?

This book is the outcome of a conference held in Prato, Italy in September 2010 and sponsored by the Oxford University Centre for Business Taxation together with the Department of Business Law and Taxation at Monash University and the Australian School of Taxation and Business Law (University of New South Wales).