Banking illustrations on tax codes

Simplicity and uniformity between country tax codes could prevent unethical behaviour.

12:13 26 May 2013

Apple was reportedly accused of trying to use the loopholes in tax codes between countries to funnel profits and avoid paying taxes. There is a call to try and eliminate those loopholes so that companies cannot get away without paying their fair share of taxes.

 

Banking institutions have learned to be very specific about what can and cannot happen with funds, so it may be nice if taxes could follow banking and become a little clearer in their expectations and regulations perhaps. Here are just a few things about banking that could benefit tax handling:

 

• Fee clarity—the banking industry is pretty diligent about setting forth any applicable fees as well as what types of situations would incur the fees.

 

• Simplifying—banking has had to find a good way to communicate with the average consumer so everyone will understand the expectations as well as alternatives and resources. Taxes need to be set forth in a similar manner to prevent confusion and loopholes. The more complex the tax code, the more loopholes there are.

 

• Notifications—the banking industry has to send out notifications of changes to terms or expectations  and it would be equally nice if changes to tax codes and expectations would be send out individually as well.

 

• Penalties—there should be clear penalties for behaviour that violates or tries to circumvent the tax code, and they should be clearly stated and applicable to other unethical tax behaviour, not just tax evasion.

 

There is a lot that needs to be redone for most tax codes, in just about any country. But if they took a page out of the banking industry’s book tax code might be simpler, more effective, and there could be a better possibility of unifying expectations and penalties across different countries.

 

This would be in order to prevent business from using the disparities between different tax codes.