Definition of tax reform - What it is, Meaning and Concept

Reform is the mechanism and consequence of reform , a verb that mentions changing something or forming it again. Prosecutor part, is what is linked to the tax (state agencies empowered to collect taxes).

A tax reform , therefore, it is a process or a provision that modifies the tax legislation .The Legislative Power is responsible for changing the laws or developing new rules, which must be promulgated by the Executive Power .

Tax reform is always linked to judicial changes since taxes are established by law .The aliquots , the assessments and the characteristics General of each rate must be specified in the legislation: therefore, raising or lowering a tax is associated with a legal modification.

To understand how a tax reform is developed, we must understand that they are taxes.It is mandatory payments that the State imposes on its citizens to solve its operation.With the money collected from taxes, a Government in charge of the administration of the State can invest in the construction of hospitals and schools, the development of roads, the payment of pensions, etc.

To avoid abuses, taxes are set by law.That is, a Government cannot collect taxes according to their particular interests or wishes, but can only collect according to what is established by the legislation.In case you want to modify some aspect of the taxes, you will have to promote, in short, a tax reform .

Fiscal reform of 1845

In 1844 a tax reform was approved in Spain (also called tax ) that laid the foundations of the tax system that the country currently has.a year earlier, in the summer, when Generals Prim, Narvaez and Serrano commanded a military pronouncement that forced the regent Baldomero Espartero to leave his post and ended the progressive period that had begun in 1840.

With only thirteen years, Isabel II reached the age of majority (it would have been normal to wait another year) and another reign began.The decision was based on the wish that there would be a regency more, which would have been the third.

That same year, Manuel Cantero de San Vicente held for a brief period the post of Minister of Finance, and it was then that he proposed to Ramon de Santillan that create a Commission to rule on the reform of the tax system of the time; and this he did, on December 18, the date for which Cantero was no more minister, but had been succeeded by Juan Jose Garcia-Carrasco.

Before the tax reform of 45 became a reality, it was necessary to analyze all the possibilities, thinking about how the system would be affected, taking into account the historical and rational principles on which they should be based to take such a step.The delivery of the opinion took place on August 5, 44 to Alejandro Mon, who had replaced Garcia-Carrasco in the Ministry of Finance a few months earlier.

It was not easy for Mon to make a decision after evaluating the possibilities that the tax reform would give to the collection of taxes, and therefore it took him until January 10 of the following year to present it., in May of 1845 it became Law, and I represent a profound change of the tax system of Spain, since it broke with the schemes associated with the Old Regime.

Simply put, the tax reform of 1845 prioritized the direct taxes (taxes the sources of wealth, income or property directly) over the indirect (taxes consumption ).