Responsive Regulation, Risk, and Rules: Applying the Theory to Tax Practice

Judith Freedman
Additional contact information
Judith Freedman: University of Oxford

No 1119, Working Papers from Oxford University Centre for Business Taxation

Abstract: John Braithwaite’s seminal work on responsive regulation has been taken up and developed by tax authorities around the world. It has had a major impact on methods of tax administration. This approach has some limitations and difficulties, however, including constitutional objections. This article discusses two particular problems, together with possible responses, which could help to appease the critics of responsive regulation in the tax arena. The first problem relates to the extent to which persuasion is a legitimate device for seeking to control behaviour that is not universally accepted to be non-compliant, because there is more than one arguable view. The second area of difficulty relates to the relationship between responsive regulation and risk management. These issues and the general challenges posed by responsive regulation to tax administration are discussed in the context of changing relationships between revenue authorities and large businesses, using a UK case study. In conclusion it is suggested that the theory of responsive regulation has great value in tax administration, but also the potential for misfiring in this area unless applied and used only where appropriate legal safeguards are provided. Legally enforceable safeguards are required to maintain the rule of law and provide a clear framework of objectives. This is not inconsistent with a theoretical approach that rests upon mutual trust; rather a sensible legal framework can provide an appropriate background for a relationship of trust. Such a legal framework is necessary not only to protect taxpayers but also revenue authorities. Building trust and involving interest groups in “regulatory conversations” are important parts of the answer, but in a tax context this must be supported by legal structures and be subject to administrative safeguards or it will not be perceived to be fair, in which case responsive regulation will fail.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sbs.ox.ac.uk/sites/default/files/Busine ... Series_11/WP1119.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Working_Papers/Series_11/WP1119.pdf [301 Moved Permanently]--> https://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Working_Papers/Series_11/WP1119.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:btx:wpaper:1119

Access Statistics for this paper

More papers in Working Papers from Oxford University Centre for Business Taxation Contact information at EDIRC.
Bibliographic data for series maintained by Dongxian Guo ( this e-mail address is bad, please contact ).