Josephine Peng/Rita Li
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As the emphasis of tax laws was on taxpayers' duties rather than taxpayers' rights, the Legislative Yuan passed an amendment bill to add a new chapter on the protection of taxpayer's rights to the Tax Collection Act. The new chapter is summarized as follows:
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Principle of taxation by law
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In the past, the tax authorities and courts seemed to attach much significance to taxpayers' duties, thereby neglecting the protection of taxpayers' rights. Under the new chapter, the tax authorities and courts are required to pay more attention to the protection of taxpayers' rights.
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The Grand Justices have declared several tax rulings unconstitutional for violating the principle of taxation by law, according to which, taxes may be levied only if so permitted by law. Hence the inclusion of the principle of taxation by law in the new chapter to prevent the tax authorities from imposing tax burdens on taxpayers beyond the tax laws (Article 11-3).
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Reasonable tax incentives
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While granting tax incentives does help achieve industrial objectives, it compromises the fairness to other taxpayers. Under the new chapter, tax incentives must be reasonable and for a specific period. In addition, the inherent costs and benefits of a new tax incentive not yet implemented must be considered in terms of protecting the rights of all taxpayers.
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Procedural rights
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In order to protect taxpayers' rights and to improve the efficiency of tax investigations, tax authorities must provide a prior written notice to taxpayers subject to investigation, stating the questions and scope of investigation. The prior notice requirement, however, will not apply in circumstances where the notice may adversely affect the purpose of the investigation (for example, where the investigation concerns the issuance of uniform invoices). The new chapter sets out the procedures for appointing agents and assistants, which has stipulated under Articles 24 and 31 of the Administrative Act.
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In order to prevent tax authorities from obtaining taxpayers' confessions through coercion, inducement or any other improper means and collect taxes and impose penalties accordingly, the confessions obtained by tax authorities through improper means will be inadmissible as evidence. This is to protect the procedural right of taxpayers.
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Better communication with taxpayers
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As tax collection is a highly specialized task, tax authorities must provide a suitable venue or forum to help taxpayers solve their tax issues and to facilitate communications with taxpayers in order to avoid any misunderstanding or unnecessary litigation.
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As most of the provisions in the new chapter merely reiterate the basic doctrines of tax laws and due process, the protection afforded is not substantive. Nevertheless, it shows that the government has acknowledged the importance of taxpayers' rights. Hopefully, the government will take a further step and provide taxpayers with substantive legal protection in the near future.
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