WHEN TAX - WHEN TAX-AVOIDANCE IS NOT CRIMINAL BY KIPKEMBOI...

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WHEN TAX-AVOIDANCE IS NOT CRIMINAL BY KIPKEMBOI ROTUK In the Bata Shoe Company case (2014), the court opined that since payment of tax is an involuntary obligation imposed by law, a taxpayer is not obliged to pay a single coin more than is due to the taxman and the taxman, on the other hand, is entitled to collect up to the last coin that is due from a taxpayer. The enactment of the Tax Procedures Act (TPA) in Kenya in 2015, and the politics surrounding the infamous Panama Papers has ignited debate on the distinction between permissible and impermissible tax avoidance. This arises from the need to maintain an intricate balance between tax collection and the rights of a taxpayer to legitimately, and now, morally, minimise their tax liability which, as the court held in the Bata case, is an involuntary obligation. Tax avoidance is the practice of exploiting loopholes in tax legislation in a tax jurisdiction to reduce the tax liability. Tax evasion on the other hand aims at reducing tax liability illegally. Tax evasion can also be distinguished from tax
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  • Summer '17
  • Law, Tax avoidance and tax evasion

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