The Legal And Ethical Implications Of Tax Evasion And Avoidance On Social Justice

Saumya Saraswat, BA. LLB, Bennett University

ABSTRACT

Tax evasion and avoidance have major ethical and legal repercussions on social fairness, particularly regarding wealth inequality. Tax non- compliance, or the failure or underpayment of taxes by individuals, businesses, and corporations, includes tax evasion and avoidance. Such non- compliance can reduce tax revenues for the government and wealth redistribution from complying to non-complying taxpayers, which can lead to a variety of socio-economic problems like income inequality, social isolation, and poverty. This paper explores how tax evasion affects income inequality and offers policy recommendations to address these issues. The study is undertaken by conducting a detailed examination of the body of research on tax planning, evasion, and avoidance, looking at the numerous ways in which these actions influence various facets of the social structure, and assessing how well the prevailing policy initiatives handle these problems.

According to the study's observations, low- and middle-class taxpayers who are unable to participate in such behaviours are unfairly harmed by tax evasion, which worsens economic disparity and reduces prospects for social development. The research shows that the poor are the demographic most impacted by tax non-compliance since they cannot frequently invest in tax planning or partake in tax evasion and avoidance techniques. Furthermore, the research shows that, specifically in developing nations, the absence of suitable legal frameworks and implementation tools frequently contributes to tax non-compliance. To solve these difficulties, the paper suggests that tax laws be changed, that tax authorities step up their efforts to uphold the law, and that business and individual tax activities be made more transparent. The paper also suggests implementing global tax norms to make sure that people and businesses pay taxes in the nations where they make earnings. Ultimately, by offering recommendations that can guide forthcoming changes in the fields of taxation and jurisprudence, this study adds to the current conversations and debates about the significance of fair taxation and social justice. To tackle tax evasion, the paper emphasizes the necessity for stronger legislative frameworks and efficient enforcement methods. It also stresses the significance of tackling income disparity and advancing social justice through just and equitable taxation policies.