commission on fiscal imbalance 合集

There are three reasons two of them pertain to the

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Unformatted text preview: olution is that communal tax coefficients are subject to an upper limit fixed in the cantonal law in proportion to cantonal taxes (for example: in the Canton of Fribourg, this limit is fixed at a maximum level of 125 % of the cantonal tax). 5.1.2. Horizontal co-ordination Horizontal co-ordination serves to apportion tax competencies and the tax yields among the jurisdictions at the same level where the tax base has its origin in several communes or cantons. In Switzerland, this has been obtained through the jurisprudence of the Federal Court of Justice. Two objectives have been pursued: avoidance of double taxation, and, preventing that taxpayers with taxable activities in more than one jurisdiction avoid the progressiveness of the tax rate schedules through geographical splitting of the tax base. Although the technical rules are rather intricate (DAFFLON, 1986, pp. 32-36), horizontal co-ordination applies itself along the following general guidelines : 17 ♦ the income tax is entirely paid in the canton and the communes of residence; ♦ any income obtained in other jurisdictions is assessed in the jurisdiction of residence according to the rules of the jurisdiction of residence (and not the rule of the jurisdiction where the income has been gained); ♦ immovable property is taxed in the jurisdiction where it exists; ♦ when corporate business takes place in several jurisdictions, the yields of the profit and capital taxes are distributed between those jurisdictions according to financially measurable components of the activity (for example: turnover, the volume of sales, total insurance premiums for insurance companies). 5.2. Tax harmonisation Different jurisdictions at the same level of government will generally find it desirable to adopt at least roughly similar systems of taxation. There are three reasons; two of them pertain to the criteria of fiscal neutrality. First, where the interjurisdictional mobility of certain economic units is of a high degree, taxation of these units, if it is employed, should be of similar form across the jurisdictions. Second, the rates at which these units are taxed locally should not vary greatly among the jurisdictions except to the extent that differences in rates correspond to differences in benefits to these units from the services provided. In this way allocative distortions in both resource use and incidence resulting from the tax system itself can be kept to a minimum consistent with other fiscal objectives of the individual jurisdictions (OATES, 1972, p. 147).18 Third, harmonisation simplifies the tax perceptibility and minimises the administration and implementation costs. Formal tax harmonisation concerns any attempt to bring the various tax systems decided independently by each jurisdiction towards a uniform system and towards a unique definition of the tax bases (letters b to d in the sequence of choice in section 3.4.). As a result, information and transaction costs are reduced for those who pay taxes in several cantons; administrative and implementation costs are reduced for the tax departments; litigious cases decrease. Real tax harmonisation is obtained when allowances,...
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