Government dragging its feet over Taxpayers' Charter - MIT

Corporate and individual taxpayers are being denied their right to a Taxpayers' Charter for Malta, the Malta Institute of Taxation says in a statement today in which it accuses the government of dragging its feet over the document's introduction.

Taxpayers' charters outline the rights and responsibilities of taxpayers in relation to issues like service standards, accountability, transparency, privacy, awareness, compliance, cooperation, and honesty.

The MIT drew up a Taxpayers' Charter modelled on that of other countries and reflecting the realities of local tax structures three years ago and presented it to the prime minister, MIT honorary secretary George Farrugia told The Times Business.

Mr Farrugia said the MIT took the initiative to draw up the document with support from its contacts within the European Fiscal Confederation to get the ball rolling. But the government has not taken the first step to rope in interested bodies for discussions over the charter and has often cited lack of personnel for the slow progress.

In his budget speech last November, Finance Minister Tonio Fenech said a Taxpayers' Charter would be developed this year to "help the public understand its rights as a taxpayer, the service and level of service that should be expected from the departments, as well as tax obligation". Mr Fenech explained the charter was not meant to replace the legal protection that the law offers its taxpayers, like confidentiality, data protection, and various other rights.

But the MIT says today the taxpaying public "is no longer satisfied with half-baked platitudes that had better not been promised, since they were neither published nor implemented."

Mr Farrugia said taxpayers were made fully aware of their obligations but not of their rights. The charter would make it clear that taxpayers were entitled to acknowledgements for correspondence, clear deadlines for refunds, and reasonable timeframes within which hearings and procedures should be completed. He pointed out that the current situation where some taxpayers endured years of legal wrangling with authorities to settle issues surrounding tax claim assessments, for instance, was unacceptable.

"There has to be discipline on both sides: the authorities and the taxpayers," Mr Farrugia pointed out. "At the moment, the situation is too one-sided. Besides, clear taxpayers' rights will help investment. Serious investors are more likely to consider favourably a jurisdiction where rights are formalised."

In its statement today, the MIT says that after "repeated and totally fruitless efforts", it took up the matter of the Taxpayers' Charter to the CFE, which comprises 32 tax organisations across Europe and has with close ties with the European Commission. The MIT says the CFE welcomed its initiative, made appropriate recommendations to the Commission, and devoted half its annual seminar to the subject. Its 50th anniversary review also devoted two-thirds of its 330 pages to a review of charters in place around the world.

"Malta is in danger of becoming a laughing stock among the developed countries of the world, let alone the EU," the MIT charges. "Countries like the UK, Ireland, France, Germany and Italy which constitute the majority of Malta's trading activity with the EU have had such a charter for quite some time now. Any further excuse about resources is simply not acceptable. The EU has already expressed its opinion on shortcomings from Malta which, as a country, we have tried to fend off with excuses of lack of resources. Can we really expect to take our place among the liberal, democratic elite of Europe and meet the 2015 Vision, if we do not grant our taxpayers a modicum of protection of their rights against the all-powerful state and its organs?"

The MIT insists the government could not cite lack of resources for the delay over the charter when 52 pages of complicated legislation have just been enacted to implement the Budget proposals. The new provisions were twice as long as the original Income Tax Act as enacted in 1948.

Yesterday, a spokesman for the Finance Ministry said a draft document was being discussed internally before its launch for public consultation.