Levels of Conformity between Income Tax Instructions with Law according to Decision No. 8 of 2011

This study aimed to clarify how far the income tax instructions match with the general Income Tax law of 2011, through a statement over the legality of the Decree Law No. (8) of 2011 and its instructions. And to clarify the rationale for the issuance of the Decree Law No. 8 of 2011and to explain how far the decision-Law No. 8 of 2011 conforms with the instructions and rules of taxation principles. Also, this study aims to clarify how the statement goes with the law No. (8) of 2011 and with international accounting standards. In addition, to clarify the difference between the Decree Law No. 8 of 2011 and its instructions from legal and accounting terms. To achieve this goal, the researcher analyzed the provisions of the Decree Law No. (8) of 2011 and its instructions, and consulted expert opinions about this decision through a questionnaire. The study results showed the legality of the instructions of Decree Law No. (8) for the year (2011), because issuing decisions falls within the powers of the President of the Palestinian Authority in the absence of the Palestinian Legislative Council. Also, the study tried to explain the reasons for the decision-Law No. 8 for the year (2011). It explained that the issuance of this decision comes in the context of updating and developing the laws that controls the work of the Palestinian National Authority and as requirements of enhancing developing the Palestinian economy. Also, the declare of the law comes in the context of increasing tax revenues and enhancing the ability to rely on the resources and self-capacity, and reduce tax evasion and broaden the tax base. The study highlighted the strengths of the Decree Law No. 8 for the year (2011), these were considering the principle of nationality instead of residence, broadening the tax base through income revenue increase, increasing personal, family and social tax breaks, minimizing tax categories, lowering upper limit ratio, and increasing public revenues .The study also highlighted the criticism that was directed to some items of Law No. (8) items for the year (2011), where some scholars noted that in social terms the law does not contribute to the creation of social balance and redistribution of income, it also increases revenues from lower income categories. In addition, the statement did not regard the principle of tax justice like equal tax breaks for residents regardless of their social status. Economically, this legally resulted in imposing new taxes from low-income. In financial terms, some scholars accuse the decision items that they increase the possibility of tax evasion, particularly value-added tax VAT and in the inability of tax departments to follow up the high income self-employed because it focuses on fixed-income categories. The results also legally showed the harmony Decree Law No. 8 for the year (2011) with the assumptions of accounting principles, where it became clear that the decision goes with the principle of continuity, because it assumes that establishments would continue for years to come and not for the current fiscal year only. This decision also goes with the principle of full disclosure by obliging every person to reveal the necessary documents and information on time. The study showed that there is a consensus among decision-materials-Law No. (8) for the year (2011) with the appropriateness rule, where the study found out that the Decree Law No. (8) for the year (2011) allows paying taxes in times which suites taxpayers' conditions. The study found that there is a consensus among decision-materials-Law No. (8) for the year (2011) with the economic theory where the size of collecting tax revenues is significant and covers any expenses incurred by the tax administration in the tax collection process. It has been found that there is a consensus among decision-materials-Law No. (8) for the year (2011) with the certainty rule, where the imposed income tax was clear, specific, and certain in all its aspects in accordance with the decision in terms of the definition of taxable, non-taxable and exempt. And was certain by tax accrual, payment, and deduction and exemptions from income, and penalties, fines and procedures of installment or postponement. The decision of Law No. (8) for the year (2011) agrees with the annual entitlement where accrual tax is calculated on the basis of one calenderer year of people’s incomes. As for flexibility, it is observed from reading into the decision-Law No. (8) for the year (2011) that the law is not flexible and says nothing about the changing economic conditions in the Palestinian society. In addition, the decision-Law No. (8) for the year (2011) agrees with the principle of residence, where income tax is imposed on residents of Palestine including any Palestinian employed by the National Authority inside or outside Palestine, non- Palestinian ordinary person who lived in Palestine for at least continual or uncontinual 183 days of residence, and a non-resident who owns a business or a part of business which are locally managed. The Decree Law No. (8) for the year (2011) achieves two types of justice; the horizontal which deals equally with taxpayers with similar conditions, and vertical justice, which takes into account the different conditions of different tax payers. This was clear through unifying tax ratios for similar income categories in the Palestinian society.