What Is Involved in Closing Tax Loopholes?

Tax loopholes refer to the clauses that a government has deliberately or unintentionally made in certain aspects in the process of formulating tax laws, which can lead to different taxpayers under the same conditions, or the same taxpayers under- or under-tax. There are two main situations: one is that some gaps are left unintentionally when the government formulates tax laws, so that taxpayers have time to explore; the other is that when the government formulates tax laws, it is intentionally open to guide taxpayers in specified directions And scope activities. ^[1]

Tax loophole

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Tax loopholes refer to the clauses that a government has deliberately or unintentionally made in certain aspects in the process of formulating tax laws, which can lead to different taxpayers under the same conditions, or the same taxpayers under- or under-tax. There are two main situations: one is that some gaps are left unintentionally when the government formulates tax laws, so that taxpayers have time to explore; the other is that when the government formulates tax laws, it is intentionally open to guide taxpayers in specified directions And scope activities. ^[1]

Tax loopholes specifically include two situations:

(1) When the government formulated the tax law, some gaps were left unconsciously, so that taxpayers had a gap to drill;

(2) When the government formulated the tax law, it consciously and consciously opened its eyes in order to guide taxpayers to carry out activities in a specified direction and scope.

The existence of tax loopholes may make taxpayers pay less taxes and provide opportunities for non-taxpayers, expanding the scope of taxpayers' tax avoidance.