In August, the finance minister released a direct tax code (DTC) which was to be a blueprint for the future of India’s direct tax regime. Analysts expressed satisfaction with the code and pointed to the relative simplicity of the language used.
Everyone recognizes that people have a right to understand how government legislation influences and shapes their day-to-day life. World leaders like Jimmy Carter and Winston Churchill have pointed to the need to use plain language in government communications. But this is more easily said than done in legal drafting.
In the pursuit of intelligibility and simplicity, you might lose sight of precision, and vice versa. The precision required of legal writing remains the same, and the language therefore has to be complex. Can tax laws ever be made simple?
It is common experience that many of the clauses that make up tax laws have to be read more than once before we understand their content. The attempt to move towards simplicity should not be given up. If we make the structure of taxation simpler, the language will be simpler too.
Also Read VR Narayanaswami’s earlier columns
I have before me a handbook released by the tax department of the UK for the use of individual taxpayers. This volume deals with capital gains tax. We shall look at a few examples of the language used in Finance Act (the Act), the Direct Tax Code (the Code) and the British handbook on capital gains (UK handbook). A comparison of the three texts will give us some insights into various aspects of language and content.
The Code begins the chapter with these words: “The income from the transfer of any investment asset shall be computed under the head, ‘Capital Gains’.” This is a matter-of-fact statement, with a passive construction which distances the reader. The word “shall” adds to the formality of the statement. Compare this with the first sentence in the UK handbook. “You may have to pay CGT if you dispose of an asset, or receive a sum of money in respect of an asset.” The moment we use personal pronouns, especially “you”, there is rapport with the reader, and the message is sent across. The Act begins with a typical legal statement: “Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H, be chargeable to income tax under the head Capital Gains, and shall be deemed to be the income of the previous year in which the transfer took place.” Here the length of the sentence is typical; cross reference to 9 other sections adds to the complexity.
The Act and the Code use sentences that run on for several lines. The piling up of section, sub-section and clause in the same sentence is a feature of legal writing that cannot be avoided. Here is a sentence from the Code: “The amount referred to in clause (d) and clause (e) of sub-section (2) of section 44 shall, regardless of anything to the contrary contained in sub-section (1), be the income of the financial year in which the amount is withdrawn or of the fourth financial year immediately following the financial year in which the transfer of the original asset is effected, respectively.” “Respectively” is a dangerous word in this context. Obviously there must be at least two antecedents, the two clauses here. They are linked by the word “and”. The second pair of items, the financial years, are linked by “or”, which makes “respectively” inappropriate here.
Another feature of legal English we can note here is the use of archaic expressions. When new terms are used, the Code has to define their meanings. But the meanings get refined with time, especially as a result of litigation and judicial decisions.
The Act made extensive use of the term “previous year”, a rather clumsy way of referring to the fiscal year or tax year. But there still remains some obfuscation in references to a particular year. It takes more than one reading to know which year this expression refers to: “...On the first day of the financial year immediately following the three financial years from the end of the financial year in which the transfer...is effected.”
To simplify the language of the DTC would be a labour fit for Hercules. A suggestion that has been made and that seems feasible is the publication of two separate books. One the Act with all its legal trappings for the expert, and the other, a handbook in plain English, in a conversational tone, for the lay person. The British publication can be a model to emulate. It has a question-and-answer format. It directly addresses the reader using pronouns of address. Sentences are generally not more than three lines. Cross referencing is kept to a minimum. Bulleted lists are used. Examples are worked out to help the tax payer learn how to compute tax. There is no information overload.
V.R. Narayanaswami, a former professor of English, has written several books and articles on the usage of the language. He looks at the peculiarities of business and popular English usage in his fortnightly column.
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