Model taxpayer charter to promote greater fairness in taxation across the world

Three professional bodies representing more than half a million tax advisors worldwide have produced a Model Taxpayer Charter of taxpayer rights and responsibilities intended as a blueprint for what a good tax system should contain.

The Asia-Oceania Tax Consultants Association (AOTCA), Confédération Fiscale Européenne (CFE) and the Society of Trust and Estate Practitioners (STEP) collaborated on the development of the Model Charter, the provisions of which were derived from a survey of taxpayer rights and responsibilities in 37 countries, collectively accounting for over 73 per cent of world GDP.

The overriding purpose of the Charter is to provide in due course a model which can be adapted and used in nation states to embed in law the basis on which taxpayers’ obligations to the State are balanced against the rights of taxpayers.

Input is now being sought on the preliminary Model Taxpayer Charter, through an extensive worldwide consultation process, in order to refine it and produce a final product that reflects a global consensus.

Copies of the preliminary report have been sent to Ministers and Deputy Ministers of Finance and Revenue of the countries who participated in the survey alongside the institutions of the European Union, the OECD, the United Nations Fiscal Affairs Committee, the World Bank, the IMF, and other interested stakeholders.

Mike Cadesky, Vice President of STEP and co-author of the report said: ’While tax administrations are typically requesting increased co-operation from taxpayers they often lose sight of the importance of whether taxpayers and tax advisors believe that the tax system is, broadly speaking, fair. This report finds that penalties alone are not sufficient to achieve a high level of taxpayer compliance and that a system perceived as fair, results in higher levels of compliance across the board.’

Ian Edward Hayes, Vice President of CFE and co-author of the report said: ‘Nowadays taxpayers are required to be transparent in their fiscal affairs in pursuit of which the first steps can be found in clear and simple tax legislation. As we begin the search for tax systems fit for purpose in the 21st Century we need to accept that transparency, clarity and simplicity can only work in an environment where taxpayers are treated equally. The greatest assurance of this will come when each and every State has adopted a taxpayer charter.’

David Russell, Honorary Advisor to AOTCA and co-author of the report said: ‘In the absence of an appropriate balance between revenue authorities and taxpayers, the essential trust required for efficient administration of the tax laws will continue to be eroded. Reference to a document that speaks with one voice, yet unites a large majority of the worldwide tax profession, will be of great assistance to emerging Asia-Oceania region economies as they grow in importance.’