Tax Administrative Discretion And Its Effective Control

The key to the rule of law in taxation is the restraint on the power of taxation, while the key point of the restraint on the power of taxation is to restrain the use of the administrative power in taxation. In all the course of the tax administration, there usually are discretions because of the limitation of rules and the appeal for"individual justice"and highly efficient administration. As a kind of relative"free"power, it is difficult to control the discretion in the course of tax administration and easy to abuse it. So the key point of the restraint on the use of the administrative power in taxation is the control of the discretion in the course of tax administration. Now, the use of the discretion in the course of tax administration is far unsatisfying, which can be evidently seen by the fairly high rate of the defeat of administrative litigation in taxation. An agreement about how to deal with this problem has not been achieved. This essay is aimed to analyze the meaning, the base, the main performance and the reason for abusing the discretion in tax administration, then make out the basic aim of it, try out the principle for it. Finally, according to the practice, from the prospective of legislation, administration and justice, I will point out the thinking and measures about how to control the abuse of it in order to give a fundamental resolution. The paper comprises four charters.Chapter One elaborates the theories on tax administrative discretion. Firstly, give a definition to the concept of tax administrative discretion. As administrative discretion of taxation falls into the category of the administrative discretion, therefore, the essay begins with defining the concept of the administrative discretion, and then combines the characteristics of tax industry to illustrate the concept and characteristics of tax administrative discretion. It is the power of tax authorities, which based on the purpose of the legislation of tax law and the principle of fairness and rationality, to make a decision during the tax collection. It is characterized by authorization, flexibility, compulsion, pre-determined effectiveness. Secondly, the essay briefly introduces the development of tax administrative discretion in China. Finally, according to the existing law on tax, the essay sums up five forms of tax administrative discretion in China: the discretionary power on facts, the discretionary power on choosing way of action, the discretionary power on tax administrative penalty, the discretionary power on seriousness of circumstances, the discretionary power on time-limit of specific administrative actions.Chapter Two analyzes the existing rationality of tax administrative discretion and the principle of how to exercise it. Tax authority, which is accredited tax administrative discretion, needs it to adjust the complex tax relations properly. There are several reasons to justify the existence of administrative discretion of taxation: the limitations of Statute need its complementarily; it's the requirement of realize the universal equity of tax law; it provides a reasonable interpretation of abstract articles of law; it's the demand of tax administration. In order to exercise administrative discretion properly, we should be guided by the principle of fairness and legitimacy. To exercise tax administrative discretion requires the insistence on the following principles: the principle of same treatment under the same circumstances; the principle of proportionality; the principles of following the guidance offered by the previous practice; the principle of utilizing the nearby resources.Chapter Three discusses the causes and forms concerning abuse of tax administrative discretion. There is no power that is not open to abuse. Equally, tax administrative discretion is no exception. The essay illustrates the main reasons for abuse of tax administrative discretion: lags of tax legislation; the administrative law executors lacking in discretion awareness; opaque tax law enforcement process ; lack of guiding principles; the outside interference, abuse of tax administrative discretion principle of taxation inconsistency, the time limit violation in tax law.In Chapter Four, the author sums up how to control the tax administrative discretion. The ultimate aim which controls tax administrative discretion lies in keeping a better balance between efficiency principle of taxation and the principle of fairness. In order to achieve this goal, control in the following three aspects should be guaranteed, such as the legislative, executive, and judicial. On the legislative front, the legislature should strengthen the legislative interpretation and refine the scale to measure discretion; perfect the procedural law of tax administration; expand the scope of judicial review in administrative proceedings; bring the validity and rationality of specific agency actions into the legitimate scope of judicial review; perfect tax administrative licensing style instruments and follow the precedent as a guide. On the front of administrative control, tax authorities are supposed to strengthen the internal supervision over law enforcement; establish and improve the accountability in tax administration system; better the quality of personnel in tax administrative agency. Referring to the judicial control, court reviews whether the staffs in tax authorities abuse their discretion or not and whether their actions infringe people's interests or not. The following criteria are used to determine whether the tax administrative discretion is abused or not: Whether it coincides with the legislative intent and purpose or not; whether they adopt a rational behavior and appropriate method or not; whether it can keep a balance between damages and benefits or not. Furthermore, there are other criteria which should also be considered in exercising tax administrative discretion: follow the due process of law; consider relevant factors; free from interference; give fair treatment to different people; follow the precedent.