Legislating Principles as a Remedy for Tax Complexity

This article considers the recent experiment in the “principles-based drafting” of tax legislation in the UK, in the light of the experience in Australia during the last 8 years. The article examines the genesis of this experiment in the tax re-writing projects that started in the 1990s, the metes and bounds of the notion of “principles-based drafting,” the allure it holds for policy-makers and some of its implications for taxpayers, revenue administrators, tax policy-makers and judges. Two examples of “principles-based drafting” that have been enacted in the Australian tax legislation are examined in detail, confirming some of the predicted difficulties. The article considers whether the experiment is proving successful and whether the initial enthusiasm for the practice will continue