Tax administration is a system for managing the taxation process by state authorities.
Under tax administration (HA) should be understood a constantly evolving dynamic process that coordinates all the work of tax authorities in the conditions dictated by the modern market economy.
Tax administration is the activity of special governing bodies and state authorities, the purpose of which is to implement the adopted laws on taxes and fees, as well as to monitor the functioning of the tax system.
Ultimately, the success or failure of the fiscal policy of a particular country depends on the correctness and logic of actions.
The elements of tax administration include :
- hierarchy or structure of tax authorities;
- duties and rights of tax authorities;
- the established procedure for the collection, processing and control of tax reporting;
- the provision of tax benefits and the application of appropriate sanctions;
- generalization and maintenance of tax statistics, the process of regulating external tax relations with states.
Tax administration at the macro level should solve the following tasks :
- to analyze the macroeconomic processes of taxation and develop baseline data to predict their future development;
- assess deviations of the actual values of economic macro indicators from the expected, identify the reasons for the discrepancy;
- carry out a detailed (for the near future) and conceptual (for the future prospects) development and clarification of tax legislation.
Tasks at the micro level :
- implement the adopted tax laws;
- to ensure the daily activities of tax authorities in collecting taxes and fees in the budget;
- develop and carry out organizational measures that increase the efficiency of the tax authorities.
Under the criterion of the effectiveness of the functioning of tax administration, it is customary to mean the mobilization of taxes and fees in those volumes that correspond to the scientifically substantiated ones while minimizing the costs of maintaining the functioning of the tax system of a given state.
Tax administration in modern conditions should continuously monitor such processes:
- steady growth in the level of tax mobilization;
- the creation of a transparent and fair NA system, which provides for the reduction of the costs of tax payers for the high-quality implementation of tax legislation and the creation of the most convenient conditions for them to pay taxes;
- ensuring equal and fair taxation conditions for such legal entities that work on the same business entity.
Principles of Tax Administration
Today, HA is based on the following basic principles:
- justice;
- transparency and predictability;
- efficiency.
Analyzing the development trends of NA, we can conclude that in order to achieve the maximum effect and stability of the tax potential, a comprehensive reform of three interrelated components should be carried out - the budgeting system, the state tax policy and tax administration.
Recently, large-scale measures have been taken to reorganize activities in tax authorities and the development of an integrated model for the functioning of tax authorities has been carried out. Particular attention is paid to putting into practice the principle of self-accrual as such a mechanism that corresponds to the tax system of the developed countries of the world. If a large percentage of tax payers do not voluntarily fulfill their obligations to the state, then the tax system is not able to successfully cope with its obligations. Tax administration will be effective only if it is based on an understandable regulatory framework, streamlined work technology, as well as a clear understanding of taxpayers about what they can expect from the tax system.