AuthorVern Krishna
ProfessionProfessor of Common Law, University of Ottawa Barrister at Law
The Income Tax Act is a public policy statute with broad socio-economic
impact and is the most perva sive of all economic laws. It affects individ-
uals and corporations in every aspect of their personal lives and busi-
ness activities. It affects all transactions domestic and international,
legal or illegal that involve an exchange of goods, services or intel-
lectual property.
Notwithstanding its pervasive inf‌luence, tax law engenders para-
noia and fear in students, who develop narcotaxi s a medical ailment
that, within thirty seconds of hearing their professors begin to explain
the law, causes glassy eye s, loss of bodily feeling and a shal low coma.
The symptoms last for nearly ninety mi nutes. Fortunately, the condi-
tion is not enduring and most students recover completely by the end
of their class.
This text introduces students a nd practitioners to income tax law
in its broadest dimensions. It addresses the subject matter based on
principles, policy and practice. The objective is to explai n what the law
is and, more importantly, why it is the way it is, and how it works (or
does not work). The answers to these questions a re not always obvious,
but they are becoming increasi ngly important as we move, albeit slowly,
toward purposive statutory inter pretation, particularly in the venue of
the general anti-avoidance rule.
The Income Tax Act is poorly drafted, uses obtuse language with cir-
cular def‌initions and cont ains sentences with mini mal punctuation. For
example, an “avoidance transaction” is one that confers a “tax benef‌it,”

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