Taxpayer's charter: Clients to be considered honest and compliant until proved otherwise

Consultation procedures on the proposed Taxpayer's Charter were initiated by the Finance Ministry on Tuesday with the launch of a draft in booklet form in tandem with the Pre-Budget 2011 Document.

The proposed charter, a Budget 2010 pledge, outlines the rights and obligations of corporate and individual taxpayers, and holds both the tax department and its clients accountable for their actions. The wording suggests the Tax Department will commit itself to impeccable customer service standards.

It spells out the entitlement and responsibilities of taxpayers in relation to service delivery levels, transparency, privacy, awareness, compliance, cooperation and honesty.

The launch of consultation document comes in the wake of harsh criticism of the government by the Malta Institute of Taxation last month. The MIT had accused the government of "dragging its feet" over the document's introduction, saying Malta was "in danger of becoming the laughing stock among the developed countries of the world, let alone the EU". Contacted yesterday, the MIT said it was too early to comment on the document.

Under the provisions of the charter, taxpayers' have the right to fair and impartial treatment which the authorities pledge to be courteous, considerate and respectful, and rapid.

Clients will be considered honest and compliant unless there is evidence to the contrary, and the department will act with integrity to ensure only legally due tax is paid and that all deductions, credits and other entitlements are properly allowed.

The Tax Department will endeavour to help clients understand information and offer assistance promptly.

Authorities also pledge to help clients minimise compliance costs, and to respect their right be advised and represented by any person on taxation matters.

The charter also underlines taxpayers' right to appeal: after clarifying the basis of their decision, authorities undertake to, on request, review the case comprehensively, professionally and impartially, quickly, and will give a full explanation of the outcome.

Privacy and confidentiality of information held by authorities will be safeguarded and all measures taken to verify identities when necessary.

While stipulating clients have the right to the proper arrangement of their tax affairs aimed to minimise liability, the document says clear distinctions are made between lawful arrangements and illegal tax avoidance schemes and evasion. Cases arousing suspicion of criminal offence will be referred to the police.

Under the charter, taxpayers are entitled to complain about the authorities' service, behaviour and actions under a planned mechanism and procedure.

The document places a similar onus on taxpayers to be co-operative, truthful, correct, and punctual. They are expected to prepare and keep proper, sufficient and updated records, and to issue tax invoices and fiscal receipts as required by law in order to prepare accurate returns, meet reporting requirements, keep track of financial affairs and be able to supply complete information on request.

Feedback must be submitted to malta.budget@gov.mt by September.