Most tax systems are in a continuing state of evolution and flux.
It is, therefore, important to examine and evaluate institutional processes by which tax systems change. The process by which laws and quasi-laws such as administrative rules evolve, through judicial, legislative or executive action or the process of refining tax law is one major aspect of the tax system. An important institution in manycountries to effect such changes is the legislation of annual government budgets. In addition, fundamental reforms and sweeping changes to tax laws are also not infrequent in most countries following a change in the ruling political party, advances in technology, a move to greater reliance on markets, or in response to external imbalances which are often accompanied by Fund-Bank adjustment programs. The process of fundamental reform especially during a transition to market or during structural adjustment is an important institutional dimension in the evolution of tax structure.