Can it be said that the tax system throughout the world is repressive!.. 

Application of the law

Tax laws tend to be repressive in (almost) all countries, when viewed from a certain angle.

The common definition of repression is "the act of using force to control a group of people and limit their freedom". This is not exactly the case when it comes to tax laws themselves, but it has to do with the way in which tax laws are applied. For example, to have to pay penalties for failure to file a tax return within a deadline date eventhough there was actually no tax liability.

In the above case, although, as per tax law, there is actually a penalty that is imposed for failure to file the tax return within a deadline date, the tax payer is very rarely exempted from the penalty even when it is later found that there was actually no tax liability and therefore, the tax authority made no loss. Therefore, the freedom of the taxpayer to be exempted from the penalty is restrained, and this, can be seen to be a repressive as well as a punitive measure. This was but a very small example. There are many other examples whereby the taxpayer's position could be jeopardised. 

Guilty until proved innocent

One the biggest difference between Criminal Law  and Tax Law is that, under the former, the accused is innocent until proved guilty, while under the latter, the accused is guilty until proved innocent!  In the unfortunate case where you get assessed under a tax investigation or tax audit, it will be up to you to bring forward evidence that you are not liable to the tax being imposed on you and not the other way round, i.e., the tax authorities have no obligation to prove that you in fact have to pay the tax that, according to them, you need to pay and that you did not ....

In a criminal case, you may avail yourself of your right to remain silent and it will be up to the prosecution to prove its case. In a tax case, you have no such right. If you remain silent, you are "ïn" for trouble.

Does the tax authority have a duty of care?

As it now stands, it would appear that it does not. In fact, it would not be false to say that there is no known case filed in a court of law of the country against the tax authority or an officer for breach of a "duty of care".

Is there any rationale behind the assertion that the taxman has a duty of care? Where the Tax authority oversteps boundaries and takes controversial legal positions against a taxpayer, the results can be absolutely devastating for the latter. In the event that the tax authority steps out of line with its audit powers it can cause serious financial harm to a taxpayer through the way it conducts its tax audit. After all, someone investigated by the Tax Authority faces the possibility of being imprisoned and can have his livelihood and reputation seriously damaged. Read more...

Disclaimer:

"This article provides information and opinion of a general nature only. It is only current at the posting date. It does not have the purpose to discredit any person or institution. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the article(s). If you have specific tax or legal questions you should consult a tax or legal professional."