Campaigners calling for an international bill of taxpayers rights may have hit their first obstacle – the tax experts themselves.
While anyone seeking a bill of taxpayers rights to parallel the Human Rights Act may have thought governments would be the most reluctant to adopt their cause, the issue seems to have prompted a split among tax practitioners.
Among many, the initial reaction is to applaud efforts by the European Financial Forum to persuade authorities of the need to establish taxpayers’ rights in an international code.
But others have immediately concluded that the problem of getting agreement on the rights is insurmountable.
Francesca Lagerberg, senior consultant with the ICAEW’s Tax Faculty, says there is a gap that could be filled with a list of rights.
‘Personally I wonder if there is a need for such an idea. Well, arguably there is. The taxpayer’s only recourse on many issues is the Human Rights Act which is still in its infancy in the UK.
‘An initiative such as this would prevent the occurrence of such issues as the widows’ bereavement allowance where tax reliefs were available to widows but not widowers,’ she says.
In the profession there are real doubts about any agreement. One Big Five partner says: ‘It’s impractical, no one would agree on what the rights should be.’
Others believe the length of time it took to bring in the Human Rights Act is an indicator of how unlikely a bill of taxpayers rights could be.
A central concern for the forum, based in Brussels and London, is the growing pressure from bodies like the OECD for governments to broaden the exchange of tax information.
The implication, the forum says, is that a more systematic approach to tax payers’ rights is required.
The forum insists that taxpayers need codified protection against ‘retrospective tax laws, disproportionality, unfair procedures and breaches of confidentiality’.
Crucially, against a background of OECD activism, the forum insists a taxpayer should have the right to object to ‘the spontaneous transfer of information’ to ‘a foreign revenue authority’.
This could constitute a step that would directly undermine the efforts of many governments attempting to tackle the ever growing problem of money laundering, especially drives made by the OECD.
In addition the report says: ‘Taxpayers should be given an explicit right to arrange their affairs in such a way as lawfully to minimise the burden of tax.’
Such a right could constitute a blow to governments attempting to crack down on what they view as unfair tax avoidance.
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