Fiscal (or Tax) Law (Meaning and Explanation)

We explain what fiscal or tax law is, its history, principles and sources. Also, what are taxes and what types exist.

tax tax law — Fiscal or tax law studies the rules on taxes.

What is fiscal or tax law?

Fiscal law or tax law It is a branch of financial law dedicated to the study of the rules that establish and apply taxes or tributes. In other words, It is the study of the tax power of the State that is, their mechanisms for obtaining income to finance public spending, that is, public investments for the common good.

Commonly, tax law is interested in the material (physical) or procedural (formal) aspects contemplated by the legal system of tax matters of a country. It also refers to the set of exceptions, sanctions, protocols and specific provisions through which the tax obligation is administered each year.

In this sense, two different branches can be distinguished within tax law, which are:

Material tax law. Which deals with the legal norms that support the tax discipline of a nation.
Formal tax law. Who is interested in the series of steps and regulations that the State must follow to settle the tax.

The difference between these two branches is flexible and is not strictly drawn, since both are part of the same legal and legal framework.

History of fiscal or tax law

Since ancient times, human beings have organized themselves in societies orchestrated by a central power. That power was occupied by the pharaoh, the king, the high priest or, later, the feudal lords or the Catholic Church itself.

In different ways, each served to organize the community politically, socially and economically. That's why the ruler was always the recipient of tributes or taxes which were collected, often forcibly and violently, from the masses of workers.

Principles of fiscal or tax law

tax law uniformity principles — The principle of uniformity implies that whoever earns more also pays more.

Tax law is governed by the following general principles:

Legality of the tax Under the premise nullum tributum sine legethat is, “there is no tax without law”, this principle establishes that taxes can only be dictated by a legally constituted power, that is, endowed with legitimacy and explicit authorization by the entire society. Likewise, it establishes that no tax may be established in such a way that it violates the law in the slightest.
Mandatory tax As its name indicates, this principle dictates that the tax is an obligation, from which no ordinary citizen is exempt, and does not depend on the individual's willingness to pay. In that sense, the collective desire prevails over the individual desire, to guarantee compliance with the law. Exceptions to this principle will only be provided for in the law that establishes it.
Tax justice According to this principle, all the people who make up society have the obligation to contribute to its maintenance, through the tax strategies that the State dictates. Said contribution, however, must be given fairly, taking into account their respective incomes and capabilities, so that the tax burden is distributed equitably throughout society.
Uniformity of tax Protected by the notion of legal equality, this principle allows for a certain “contributory inequality” that requires more contributions due to the same tax from those who earn the most within a society.
Tribute advertising This principle establishes, in simple words, that tax matters must be public, that is, there must be no room for secrets or private management, but everything must take place under the full gaze of others, to minimize the margins of corruption and ensure compliance with the above principles.
Certainty of the tribute According to this principle, it is not enough for the law to create the tax, but it must also be accompanied by all the necessary provisions for its regulation, control and implementation, thus ensuring that there is the greatest possible certainty regarding its operation.
Non-confiscatory nature of the tax This principle is established to ensure that the State cannot attack, through taxes, private property. That is why it dictates that the tax paid for a good or service cannot be equivalent to the entire good or service, since that would be equivalent to its confiscation by the State.
Economy of collection Although the State is capable of creating and administering taxes, according to this principle it can do so only in order to guarantee its own existence and maintenance, not for enrichment purposes of any kind. For this reason, it will not be able to demand from citizens more than what is strictly necessary to continue functioning.

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Sources of fiscal or tax law

The sources of tax law are generally limited to what is established by the Doctrine, that is, to the formal provisions contemplated in laws, norms, decrees, international treaties and jurisprudence. All of this within the legal framework established by the Magna Carta or National Constitution.

Taxes

We call taxes or tributes to a series of monetary obligations established by law through which all citizens contribute to the maintenance of the State. This obligation is established by law in the legal system itself.

Its compliance can and must be exercised by the State, empowered by the law itself to exercise a proportional punishment in the event that any citizen fails to comply. The purpose of these taxes is to guarantee the possibility of existence of the State and the social pact that it guarantees through its laws and decrees.

Types of taxes

Broadly speaking, taxes can be classified into:

Taxes on income, profits and capital That is, amounts calculated from the non-salary income of citizens.
Social security contributions They are portions of workers' salaries that are allocated to the social security system that exists in their country, which can be used in case of health emergencies or in the form of a retirement pension when the time comes.
Taxes on labor. Through which the State taxes the owners of large businesses and companies.
Property taxes. Calculated in such a way that those possessors of more assets than strictly necessary contribute proportionally to the State.
Taxes on goods and services. Through which the State receives a portion of the money destined for a purchase, rental or commercial operation that is carried out.
Other taxes. Intended to value certain conditions, events or companies.