440,000 votes for 2010 Taxpayer's Human Rights Survey in Taiwan
On September 15, 2010, a press conference of “2010 Taxpayer’s Human Rights Survey” is hosted by Offices of four multi-party Legislators: Ms. Lo Su-Lei, Ms. Tien Chiu-Jin, Mr. Kang Shih-Ru, Ms. Lu Siou-Yan, Chinese Association for Human Rights, Taiwan Bar Association, Taipei Bar Association, Taiwan CPA Association and Taipei CPA Association today.
The Chinese Association for Human Rights launched a campaign for “Taxpayer’s Human Rights Survey” since the 7th of August. Thirteen violations of taxpayer’s human rights have been selected by scholars and tax experts and posted on the web to seek votes from taxpayers. As of end of August, 440,000 votes are selected, in their opinions, the most serious violation of taxpayer’s rights. The “Tax authority exceeds administrative power and distorts the nature of income at will.” is the top one out of thirteen issues. Legislator Ms. Lo Su-Lei and Ms. Tien Chiu-Jin attended the press release together to discuss the chaos and solutions of Taiwan’s taxation.
Top 1: The nature of income is distorted by tax authority.
The nature of income should be recognized according to the explanation notes from the regulating bodies. But very often, tax authority will apply its own standard in the recognition of income and overstep other branches of the government. There is no pre-defined standard and taxpayers are always annoyed. Famous model Ms. Lin, Chih-Ling used to file tax returns under business income for years. But without any prior notice, tax authority assesses taxes with salaries rates and issues tax bills and penalties. The distortion of nature of income is very obvious in Tai Ji Men unlawful tax case. The nature of “monetary gift” in the case should be tax-exempt by law (Civil Act:406) and it has been confirmed in the three court trials in judicial system. However, the tax authority recognizes the nature of gift as tuition income from running a cram school. The mistreatment of income has led to serious tax dispute lasting for more than 14 years.
Top 2: The petition system is not functioning at all
When taxpayers have questions regarding the tax bills, they go to the petition committee to seek redress. Very often the petition committee will revoke the original tax payment notice and add a comment “Apply another just treatment”. As a result, even though the original bill has been revoked, tax authority will issue another tax bill with only slight modifications. The winning of petition means nothing. In the ensuing lengthy process of petition, taxpayers have to post collateral for the amount owed and its penalty, otherwise, taxpayer’s assets would be auctioned off. Taxpayer would also be banned from traveling overseas or even detained. The constitutional rights of existence, property, work and freedom to travel have all been violated by tax agents.
Top 3: Judges do not familiar with tax codes and the administrative court is akin to court of losing cases
Scholars have commented that judges in administrative court are not familiar with tax codes. The judges are trained by tax agents. As such, they tend to be in favor of the orders of the tax authority. No wonder taxpayer’s winning rate in administrative court has averaged below 10%, which is a big contrast to the winning chance of close to 100% of Germans in similar cases.
Top 4: Under-qualified tax agents cannot be fired.
The tax authority in Province of Yun-Nan, China, introduced the system of accountability two years ago to stop tax agents from abusing government power. In 2 years, 2,942 government officers have been disciplined. The system has demonstrated that officers have to bear responsibilities for being in position. Legislator Lo, Sui-Lei and public accountant Chou, Chih-Cheng have proposed under-qualified tax agents should be fired. Professor Keh-Chang Gee law in National Taiwan University made a comparison between Taiwan and Korea, saying “Korea has revised 6 times the tax codes to better protect the rights of taxpayers in the past 10 years. One of the reasons why Korea overtakes Taiwan in economic development is they have made more progress in legal and structural reform.”
Top 5: Tax authority does not have to bear the burden of proof.
If taxpayer receives tax bills and penalties, it should be tax authority’s responsibility to prove tax evasions by taxpayer. This is similar to presumed innocence in the criminal law. But in the administrative court, taxpayer has to prove his innocence.