Over the past two decades, tax authorities around the world have worked tirelessly to improve the gathering of tax information. The period has been marked by a series of both multilateral initiatives, such as the work of the OECD Global Forum, and unilateral initiatives, such as the US FATCA legislation. The focus throughout has been largely on tackling the issue of tax evasion by taxpayers who hide funds from tax authorities.
This work on greater transparency continues, but in a range of major jurisdictions the issue of tackling what is seen as unacceptable tax avoidance has also become a major focus of debate. At the heart of this debate are questions about fairness in the sharing of national tax burdens and concerns over the funding of budget deficits.
STEP recognises that a fair tax system must include effective measures to counteract abuse. Equally, however, there must also be a clear balance between taxpayer obligations and taxpayer rights. Much of the current debate about abusive tax avoidance in essence focuses on moves not just to ensure that the obligations on taxpayers are more rigorously enforced, but also to increase, at times significantly, the compliance burdens on taxpayers. It is unfortunate that the issue of how to preserve a balance with taxpayer rights – such as the right to certainty in tax laws – has received relatively little attention from those campaigning against tax abuse.
To assist the debate and help develop a more consistent international approach, STEP was delighted to work with Confédération Fiscale Européenne (CFE) and Asia-Oceania Tax Consultants Association (AOTCA) to develop the Preliminary Report in 2013, which included a survey of taxpayers' rights and obligations in a broad range of jurisdictions. What emerged from this work was that there is an international consensus on what is fair and reasonable in terms of both the protections to give taxpayers and the obligations on taxpayers. The ultimate aim of our collective work in this area was therefore to synthesise this consensus into a model 'Taxpayer Charter' that reflects current international best practice.
This Final Report of the Model Taxpayer Charter follows a period of consultation with tax authorities, international organisations and practitioners around the world, and takes into consideration the feedback and suggestions received.
International professional bodies such as STEP and our colleagues in CFE and AOTCA have a key role in promoting an informed debate and developing a consistent approach internationally to what is a complex topic. Most professional advisors would agree that a level playing field should be an important goal of the various multilateral initiatives on tax practice that are starting to take shape. The professional bodies can play a key role in helping to develop a co-operative rather than combative approach. To facilitate a similar co-operative approach in respect of tax planning, it is important that professional advisors are engaged at an early stage in the developing debate at both a national and international level.
STEP strongly supports initiatives which help ensure tax systems around the world work fairly and predictably and which fight abuse. What must be avoided at all costs are measures designed to tackle the few who abuse the system through a significant additional cost for the great majority of ordinary taxpayers or approaches which undermine certainty and confidence in tax systems. As a professional body, we share with tax authorities the common goal of tackling unreasonable abuse of tax systems around the world. STEP looks forward to helping the work of governments in this area in any way we can.
Chief Executive, STEP Worldwide