Imposing an Additional Amount of Tax in a System of the Goods and Services Tax (1993-2005)

Abstract

Since the introduction of a new tax system in 1993 most decisions about whether something is taxable and what is the extend to which it should be taxed has been transferred to the taxpayers. The system of self-assessment on the one hand gives the taxpayers the opportunity to compute their own tax bills and on the other to evade taxes. That is why tax sanctions seem to be essential part of current Polish tax system. Nevertheless, the issue to generate the most controversy with respect to tax sanctions is the legal character of such instruments.

This paper is to present one of the most controversial anti-avoidance measures provided by the act on the goods and services tax; imposing an additional amount of tax. The fundamental point about this attempt is that the instrument must be examined in context of the notion of a legal sanction as a legal phenomenon.

Part I reviews different kinds of subjects (taxable persons and tax representatives) liable to the tax sanction. It demonstrates that liability deriving from tax sanctions result from an infringement of some tax duties. Part II discuss different forms of the sanction and its evolution since the introduction of value added tax in 1993. What emerges from the survey of these different forms of sanction is that they, in contrast with other policy instruments, directly increase tax liability. The final part of the paper points out the weakness of the concept of tax sanction as an additional tax and concludes that imposing an additional amount of tax ought to be considered as a tax penalty.