Changing tax laws to reduce tax avoidance through the use of Research Paper

Changing tax laws to reduce tax avoidance through the use of partnerships - Research Paper Example Lipatov, (2011) argued that it is unfair for a common man earning a meager income that is just enough to sustain themselves to be charged every penny of his revenue whereas big companies and wealthy people are exempted through avoidance of taxation. Non-remittance does not only reduces government revenue but also brings the taxation system into disrepute therefore authorities charged with taxation needs to prevent avoiding tax or keep it within check (Desai & Dharmapala, 2006). According to PWC (2012), Majority of those involved in tax avoidance usually invoke section 88 and section 100 of the income tax act in order to shield themselves. Section 88 have therefore been barred from being referred to when the gain from the interest of partnership far exceeds the cost of the asset fair market value (Government of Canada, 2012). The budget proposals have also propose for the application of section 100 up to the point of sale of partnership interest to the person who is not a resident of the place in reference, this will however be an exception in a situation whereby is carrying out its activities through a permanent establishment (Mullainathan, Schwartz stein, & Congdon, 2012). A Partner should also be able to waive on behalf of all his partners within a three year limit for making a determination (2012 Federal Budget Commentary). The law should be clear enough according to Rosenberg (1989) because this will stop the taxpayer`s personal exertion income being taken as being income of the partnership and later being diverted as the companies` loss under the agency and management agreements. Reason being surpluses or net profits from those monies will be forwarded from that partnership daily to the group finance companies (Batt, 2012). The partnership acts should introduce various amendments to the taxes acts, that is according to the Blundell (2011) view. These