Tax Evasion Essay Example


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The Difference Between Tax Evasion and Tax Avoidance

Tax Evasion Essay Introduction

The tax is financing from natural and legal persons by the government to provide public services. Today, the necessary taxes in public finance are collected based on the declaration, and the taxpayers' statements are respected. The government's receivables from its citizens free of charge cause the tax to be met negatively by taxpayers and taxpayers to resist tax. Besides, taxpayers are not able to develop tax awareness. Also, the weak belief that taxes are spent in public services, lack of tax penalties, the complexity of tax laws, ineffectiveness of tax administration may make them avoid declaring their taxes resulting from their economic activities, and they may apply for tax evasion. Therefore, this situation necessitates the existence of a competent tax control system.

Historical Development of Tax

The history of taxes is as old as the history of states. However, when and how taxes emerged is not known precisely. When we look at its historical development, it is seen that the origin of the tax is a gift of material and form. Later, it maintained its voluntary nature, but gradually took the form of aid with a traditional task character. Finally, it became a real compulsory payment. The tax was originally a kind of gift given to kings, tribal leaders, and feudal lords voluntarily for religious and moral reasons. As time went on, the people holding sovereignty felt the need to seek financial help from some social classes themselves. Thus, the superiority was passed from the people who gave the gift to the receiver. With the development of public services and the creation of central states, current revenues became insufficient, and tax became a mandatory obligation.

There are three main stages of the tax payment method in the historical development process. In the first stage, it was paid by working physically. The physical tax payment method was used in some periods to punish those who do not pay their taxes. In the historical development process of the tax, 'tax in kind' was used instead of the second phase of physical work. In an environment where there is no money, taxes are paid in terms of goods. In the third phase, tax is paid in money. In this period, when the market economy rules are valid, tax is paid in money.

Tax Avoidance

Tax avoidance is widely accepted as an act of reducing tax within its legal limits without violating the law. Tax avoidance is specified as tax and other laws, and the utilization of the exemptions and exemptions specified in the regulations issued by the State and other legislation and the use of items that can be written as expense in tax laws. In tax avoidance, the person is on legal ground. He makes his preferences variable to avoid paying taxes or paying less tax. For example, instead of paying high special consumption tax, VAT, and MTV taxes by purchasing a 2000 cc engine, the person chooses a car with a lower cylinder volume. Likewise, one can find the tax burden on cigarettes or drinks high and change their habits. Alternatively, the person can shift their investments to areas where there is no tax burden or lower.

You are retired, you have no other income; if you buy a house under 200 square meters, you will not pay any property tax. So you can avoid tax with your home preference as well. It is possible to give more examples. The critical thing in tax avoidance is that the tax-avoiding person does not violate any rule of law. With the preferences within the existing legal norms, the person chooses to pay less or no tax.

Tax Evasion

Tax evasion is defined as the partial or total failure of taxes and liabilities in violation of tax laws. The reasons such as high tax rates, the necessity of continuing to compete against rival taxpayers, fewer taxation efforts, inadequate tax auditing, and indirect taxes, which are higher than direct taxes, cause taxpayers to evade tax. In tax evasion, the person breaks the rules stipulated by the relevant laws. The person declares the tax that it has to pay low, engages in transactions and actions that will lead to a low declaration, and thus pays less tax than he should. Alternatively, the person does not pay any tax by excluding taxable income earnings entirely from the knowledge of the tax administration. Therefore, the person misses the tax as much as the difference between what he has to pay and what he pays. It causes "tax loss" with the nomenclature in the Tax Procedure Law.

Article 359 of the Tax Procedure Law titled Smuggling crimes and penalties provide information on tax evasion. Tax Procedure Law article 341; It is defined as the tax not being accrued on time or accrued incompletely because the taxpayer or the responsible person does not fulfill his duties related to taxation in a timely manner or is incomplete.It is also considered as a tax loss to cause the tax to be accrued inadvertently or to be returned unfairly by false statements about personal, marital status, or family status or by other means.

According to this; Performing accounting and accounting cheats in books and records, Opening an account on behalf of individuals who are not real or have anything to do with the transactions subject to registration, To record the accounts and transactions that should be recorded in the books in whole or in part, in other books, documents or other recording media, causing the tax base to decrease, Editing or using misleading documents in terms of falsification or hiding of the books, records, and documents or their content, Failure to submit books and documents to the persons authorized for tax inspection during the examination, although the existence is fixed by notary certification or other copies, The destruction of books, records, and documents that are kept or regulated in accordance with the tax laws and which are required to be kept and submitted, to replace other pages by replacing the book pages, not to put any leaves or to arrange the originals or copies of the documents in whole or in part, using these documents, Documents that can be printed by people who have an agreement with the Ministry of Finance, printing, or deliberate use of documents even though they do not have an agreement with the Ministry.

Tax Evasion Essay Conclusion

Tax evasion is defined as the partial or total failure of tax liabilities in violation of tax laws. Tax avoidance, on the other hand, means that the individuals get rid of being taxpayers, and the treasury loses tax without acting against the tax laws. As will be noted, while tax evasion is illegal, tax avoidance refers to the outcome of exploiting law gaps under the law. The State obtains these resources for financing from taxpayers by law and without compulsion. Since this situation puts pressure on taxpayers, taxpayers can go to tax evasion or tax avoidance in order to reduce this burden. However, these roads, followed by taxpayers, do not only increase informality but also cause severe damage to the national economy.

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