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Clarity of tax legislation falls short

How much mortgage interest can I claim back according to law? Or maintenance payments, how much do the tax authorities let me deduct? Many citizens struggle with questions about the application of tax legislation. Roberto van den Heuvel investigated in what way tax legislation should provide clarity to citizens and will defend his PhD dissertation on 29 November.

'Complaints are often voiced in society when it comes to the impact of tax rules in daily situations’,  Van den Heuvel explains why he chose this topic for his PhD research. Many people find legislation difficult to understand and this is cause for concern according to the researcher. 'Legislation, after all, is the backbone of the rule of law. Citizens and businesses are expected to know about legislation and apply it correctly. Government authorities, at the very least, can be expected to formulate statutory rules  in such a way that citizens know what they can expect.'

The government’s duty to formulate statutory rules in a comprehensible manner can be traced back to the requirement of clarity. Van den Heuvel analyzed how the government has given substance to this requirement. 'We can see this in particular in the so-called Aanwijzingen voor de regelgeving (drafting instructions for legislation). This document provides legislative draftsmen with instructions they should follow when drawing up legislation.' Van den Heuvel investigated how the requirement of clarity is fleshed out in legal literature and the judicial system. The researcher proceeded to draw up a number of conditions which tax legislation should meet to be in keeping with the requirement of clarity.

Roberto van den Heuvel

Attention required

The outcome of the research calls for further action: the current drafting instructions for legislation contain too few instructions to provide sufficient certainty to citizens to enable them to understand the objective, scope and operation of statutory provisions. 'The lack of such instructions is of particular concern in the field of tax legislation’, Van den Heuvel claims. 'Citizens, after all, want to know what the tax consequences are of their intended activities.'

In his dissertation, the researcher proposes an addition to the current drafting instructions for legislation. He divides the conditions required of tax legislation when it comes to clarity into four categories: conditions regarding the formulation of standards, conditions regarding the arrangement of the legal framework, conditions regarding the capacity of taxpayers and conditions regarding the explanation of legal statutory provisions.

Van den Heuvel: 'I hope that my research will benefit the institutions involved in assessing the clarity of tax legislation. For example the Council of State, parliament and the judiciary.’

Supervisor Professor A.O. Lubbers on Robert van den Heuvel’s research:

'Tax legislation should be simple, clear and accessible. In practice however tax legislation is often too complicated. When establishing tax legislation a better assessment must be made of whether the legislation meets the requirement of simplicity, clarity and accessibility. To give substance to these terms we need to gain inspiration from practice. Van den Heuvel demonstrates ably how these terms are given substance in practice by among other things literature, the legislator, the Council of State and the courts. I hope that the results of his research will bring us closer to making tax legislation less complicated.'

Text: Floris van den Driesche
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