Research On Administrative Discretion Of Taxation Audit

The law has its own limitation, and could not cover all human issues which are changing all the time. So it is necessary not only to effectively restrict the power in the hands of law-executors, but also to fully exert their initiatives, enthusiasm and creativity during their work, which means that the legal legislation in many areas and fields only sets out some principles that will be implemented by the law-executors, so that they could apply them considering the actual situation. Administrative Discretion, as a form of administrative power, is likely to be abused because of its inherent preemption. In traditional opinions, Administrative Discretion can be controlled through legislation and judicature. After the legislation and judicature have got successful experience and historical lessons, the internal control of administrative system begins to explore and research to control Administrative Discretion and this attracts attention from the theoretical circle. The internal control of administrative system, in which administrative institutes are the controlling subjects, in virtue of detailed control mechanism and well-established administrative ethnics, demonstrates an irreplaceable predominance because of its own initiative, professionalism and coincidence, and thus can achieve more effective outcome.In today's "tax state", Tax Audit is the most important part of taxation. So it is much necessary to effectively regulate and control its Administrative Discretion. This paper, beginning with the current controlling status of Administrative Discretion in Tax Audit, affirms and summarizes the Deming Cycle of Administrative Discretion in Tax Audit, which is currently in the process of perfection. Through research on Tax Audit Offices having power to enforce laws below provincial Local Tax Bureaus, this paper tries to search for the main problems on the Administrative Discretion in Tax Audit by combing one by one the four procedures within Tax Audit, i.e. Searching Audit Target, Investigation, Hearing, Enforcement, and further analyzes the causes behind the problems and present controlling measures, then proposes how to effectively operate and control the Administrative Discretion from the angles of system establishment, internal organization structure, function allocation and improvement of the all-round making of the law-executors. Lastly, by contrasting the Tax Audit models of foreign countries and China, the paper elaborates on the logics and applicability of some effective approaches in foreign countries, such as (i) coincidence of Tax Audit administrative power and Criminal Investigation, (ii) weaken the partial function of the procedure of tax management, strengthen the intermediary function of tax agents, and simultaneously reduce the staff ratio of tax management while increase the staff ratio of Tax Audit, (ⅲ) emphasis on resolving conflicts by means of intermediation according the principle of Efficiency First with consideration of Fairness.