It goes without saying that enforcing the tax code is important. Tax authorities are rightly granted various powers to deter and punish non-compliance and undercompliance. The ability to charge interest and penalties for underpayment of tax or other breaches of the tax rules (such as failing to file or keep records) is present in nearly every tax system as a result (we say nearly every tax system because that is what the IMF says (see Designing Interest and Tax Penalty Regimes (IMF) 18 March 2019) – presumably the IMF knows of one or two systems where interest and penalties are not charged!) It might be considered particularly important in the case of indirect taxes that this system of sanctions should be more strict than in the case of direct taxes as in the case of the former the body collecting and paying the tax does...
