Designing Interest and Tax Penalty Regimes

By Christophe J Waerzeggers, Cory Hillier, Irving Aw

March 18, 2019

Preview Citation

Format: Chicago

Christophe J Waerzeggers, Cory Hillier, and Irving Aw. Designing Interest and Tax Penalty Regimes, (USA: International Monetary Fund, 2019) accessed December 11, 2024

Summary

Nearly all tax systems have some form of interest and tax penalty regimes. Interest payable on any late or underpayment of tax seeks to protect the present value of the tax amount to the government budget, whereas penalties are intended to deter taxpayers from defaulting on their tax obligations—and to punish them if they do—to achieve horizontal equity vis-à-vis compliant taxpayers. As interest and penalties serve very different objectives, they should not be applied in a mutually exclusive manner. This Tax Law IMF Technical Note focuses on the key issues that should be taken into consideration in designing interest and penalty regimes in tax legislations.

Subject: External debt, Interest payments, Interest tax, Legal support in revenue administration, Revenue administration, Tax administration core functions, Tax law, Tax policy, Taxes

Keywords: Ability to pay, Africa, Incentive regime, Interest payments, Interest tax, Law framework, Legal support in revenue administration, Penalty regime, RegimesDesigning interest, Tax administration, Tax administration core functions, Tax authorities, Tax authority, Tax authority exercise, Tax law, Tax official, Taxpayer compliance, TLT

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Tax Law Technical Note No. 2019/001
Stock No:

TLTNEA2019001
ISBN:

9781498302012
ISSN:

2523-5753

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