Privatized tax collection


Privatized tax collection

Privatized tax collection occurs wherever the state passes on its obligation to collect taxes to private companies or firms in return for a fixed or ad valorem fee. This contrasts with tax farming where a private individual or organization pays off a pre-determined tax debt, and then subsequently recoups that payment by collecting money from the people within a certain area or business.

A modern example of a variation of tax farming is the United States IRS outsourcing of the collection of taxpayers' debts to private debt collection agencies. In September 2006, the IRS began to outsource the collection of taxpayers debts to private debt collection agencies. Opponents to this change note that the IRS will be handing over personal information to these debt collection agencies, who are being paid between twenty-two and twenty-four percent of the amount collected. Opponents are also worried about the agencies being paid on percent collected because it will encourage the collectors to use pressure tactics to collect the maximum amount. IRS spokesman Terry Lemons responds to these claims saying the new system "is a sound, balanced program that respects taxpayers' rights and taxpayer privacy." Currently there are other state and local agencies that are using private collection agencies and have not had any problems. [ [http://biz.yahoo.com/ap/060822/irs_debt_collection.html?.v=2 IRS Moves Ahead on Debt-Collection Plan] ] [ [http://www.laborradio.org/taxonomy/term/120 IRS Presses Ahead With Privatization of Tax Debt Collections - 09/14/06] ]

Examples of companies that collected taxes

* Capita Group

Privatization of tax collection

In essence, privatization of tax collection commenced when governments moved from official assessment of leviable amount of duties and taxes to the procedure of ‘’self-assessment’’ by the assesses. [Chowdhury, F. L. "Evasion of Customs Duties in Bangladesh", 19992, MBA dissertation submitted to the Monash University, Australia ] In this procedure, the tax-payer calculates his own tax liability and pays taxes based on that. Government verified genuineness of such self-assessment through a process of audit, which may be selective or blanket applied to all tax-payers.

Services of PSI Companies

Pre-shipment inspection (PSI) agencies are companies that carry out physical inspeciton of the cargo and certify the value of the consignment after verificaiton of the declared price against the ruling internaitonal price. Then the Customs authorities calculate the leviable of amount of duties and taxes on the basis of that certified value. This essentially has shifted the critical task of tax assessment to the PSI companies from the Customs inspectors and appraisers who were supposed to ascertain the assessable value of a consignment in accordance with the GATT valuation code.

References

Further reading

* Chowdhury, Faizul Latif, "Corrupt bureaucracy and Privatization of tax collection in Bangladesh", 2006: Pathak Samabesh, Dhaka.
* Hood, Christopher, 'Privatizing UK tax Law Enforcements', "Public Administration", Vol. 46, Autumn, 1986.
* Low, P, "Preshipment Inspection Services", World Bank Discussion Paper No: 278, The World Bank, Washington.


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Tax farming — was originally a Roman practice whereby the burden of tax collection was reassigned by the Roman State to private individuals or groups. In essence, these individuals or groups paid the taxes for a certain area and for a certain period of time,… …   Wikipedia

  • Tax avoidance and tax evasion — Tax avoidance is the legal utilization of the tax regime to one s own advantage, in order to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by… …   Wikipedia

  • tax — ▪ I. tax tax 1 [tæks] noun [countable, uncountable] TAX an amount of money that you must pay to the government according to your income, property, goods etc, that is used to pay for public services: • The President said he would cut taxes for… …   Financial and business terms

  • Russia — /rush euh/, n. 1. Also called Russian Empire. Russian, Rossiya. a former empire in E Europe and N and W Asia: overthrown by the Russian Revolution 1917. Cap.: St. Petersburg (1703 1917). 2. See Union of Soviet Socialist Republics. 3. See Russian… …   Universalium

  • Italy — /it l ee/, n. a republic in S Europe, comprising a peninsula S of the Alps, and Sicily, Sardinia, Elba, and other smaller islands: a kingdom 1870 1946. 57,534,088; 116,294 sq. mi. (301,200 sq. km). Cap.: Rome. Italian, Italia. * * * Italy… …   Universalium

  • Privatization — Part of a series on Capitalism Concepts …   Wikipedia

  • South Africa — Republic of, a country in S Africa; member of the Commonwealth of Nations until 1961. 42,327,458; 472,000 sq. mi. (1,222,480 sq. km). Capitals: Pretoria and Cape Town. Formerly, Union of South Africa. * * * South Africa Introduction South Africa… …   Universalium

  • Portugal — /pawr cheuh geuhl, pohr /; Port. /pawrdd too gahl /, n. a republic in SW Europe, on the Iberian Peninsula, W of Spain. (Including the Azores and the Madeira Islands) 9,867,654; 35,414 sq. mi. (91,720 sq. km). Cap.: Lisbon. * * * Portugal… …   Universalium

  • japan — japanner, n. /jeuh pan /, n., adj., v., japanned, japanning. n. 1. any of various hard, durable, black varnishes, originally from Japan, for coating wood, metal, or other surfaces. 2. work varnished and figured in the Japanese manner. 3. Japans,… …   Universalium

  • Japan — /jeuh pan /, n. 1. a constitutional monarchy on a chain of islands off the E coast of Asia: main islands, Hokkaido, Honshu, Kyushu, and Shikoku. 125,716,637; 141,529 sq. mi. (366,560 sq. km). Cap.: Tokyo. Japanese, Nihon, Nippon. 2. Sea of, the… …   Universalium


We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.