Overview of Tax Reform Law
A tax reform law is normally passed by the national or central government of a country. A tax reform law is passed in order to address the crucial problems that are there in the tax structure of a country and its main purpose is to correct such situations.
Main Purposes of Tax Reform Law
Following are the chief purposes behind passing a tax reform law:
To make the income tax code more simple than what it already is
To remove the tax shelters and such other circumstances
To widen the base of the tax structure
Areas of Tax Reform Law
The tax reform laws address a variety of areas in a particular economy. However, these are the primary areas that are addressed by a tax reform law:
- Rates of income taxes
- Removing the losses as well as the tax shelters and such other shortcomings
- Provision of tax benefits
At certain occasions the tax reform laws are also instituted in order to alter the names of important tax laws. For example the Tax Reform Act of 1986 changed the name of the Internal Revenue Code of 1954 to the Internal Revenue Code of 1986.
The tax reform laws may also amend a few aspects of such laws. The tax reform laws make important changes to the tax structure, thereby making it more convenient for the taxpayers. Often by doing this they are able to reduce the chances of unfair practices on behalf of the taxpayers.
The tax reform laws may also offer tax benefits. These benefits are important as far as the economy of the country and the taxpayers are concerned. The tax benefits encourage the taxpayers to pay off their taxes at the right time by reducing the burden of taxes imposed on them.