Dorota malinowska A last year student of Law at the Faculty of Law and Administration at Warsaw University and Erasmus student of Law at Cardiff University. The participant of the international program EUCOTAX Wintercourse 2014. A scholar of the third edition of Media Academy, a project of the Foundation 2065 named after Leslaw A. Paga. Member of the Tax Law Society at Warsaw University. She is particularly interested in international tax law and actively participates in both Polish and foreign workshops and conferences concerning tax law.
Fair taxation
Fairness in itself is one of the most discretionary terms ever, especially for purposes of tax law it appears ambiguous and uncertain. Nevertheless, fair taxation is necessary and should be respected by the state during the creation of tax policy. This topic could be described in a number of volumes and still remains inexhaustible. Thus, I will briefly present only current initiatives undertaken around the world. The history of taxation proves that the term fairness does not have one meaning. It takes different shapes and it changes with transitions in systemic, social, and economic conditions. The clear relativity of the term tax fairness is tied to a particular period. The postulation of fairness in taxation is connected with an objective criterion, not only for justification of the tax obligation idea, but also for formulating tax solutions compliant with the rules according to which the tax burden should be spread. The idea of fair taxation also concerns ethical issues, which are strongly connected with social and economic topics. Fairness as a postulate of order and becomes a natural prerequisite for the creation of tax systems.1 There exist a number of theories and concepts concerning fair taxation, nevertheless there is no one golden rule. It is very common that when one rule is fair for one group of people, at the same time it is less fair for another. Despite the fact that fair taxation is in the general interest, this reflection has not yet resulted in one conclusion and solution, which would be objective and at the same time recognized as fulfilling expectations of both the authority that imposes taxes and the taxpayers.2 Undoubtedly, this rule should exist and be respected, but it is difficult to find a solution that will satisfy everyone. Ricardo’s Edinburgh’s rule states leave them as you find them.3 It means that tax burden cannot be too high and cannot cause impoverishment. Tax should not be an excessive burden because then it causes economic hardship. However, practice shows that this rule is not always respected by the state.
These days fair taxation has greater importance than a few decades ago. Currently, it is topical inter alia because of the behaviour of big companies like Starbucks, Apple, Amazon and Google, who avoid paying the right amount of tax. Their behaviour is sometimes punished by customers boycotting services they provide or products they sell. However, this is
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not the only means to force them into paying the correct tax.
With respect to the importance of fair taxation and a practical approach to these ideas, today’s initiatives, such as the Fair Tax Mark, exist to create a fairer and more understandable tax system and to encourage big companies to pay tax in accordance with proper rules (by way of example, the reform of taxation is also the subject of interest of BEPS the Base Erosion and Profits Shifting). The Fair Tax Mark was set in motion in February 2014 in the United Kingdom, and the founder and technical director of this campaign is Richard Murphy. As is described on the website, they are a non-profit social enterprise that brings together ethical consumers and businesses by bridging the gap between corporate responsibility and the wider tax justice movement.4 Accreditation made by the Fair Tax Mark is a signal for customers that this brand conducts itself pursuant to the highest standard of taxation and that they manage ethical tax policies. Participation in this campaign for the companies is voluntary, but is described as a label for good taxpayers. It ‘sends’ information to the customers that this company or organization pays the right amount of taxes, according to fair rules.5 This idea was created as a response to the actions of big companies who avoid paying taxes, for example by using tax havens. It is worth mentioning that fair taxation is not interchangeable with high tax burden. The situation might occur where the tax burden will be low or non-existent and taxes were fairly paid (inter alia it could be caused by the losses of the company).