Changes to how consumers and businesses can challenge a Revenue tax assessment will have a chilling effect on such appeals, the Irish Tax Institute says.
It would punish a taxpayer in the court of public opinion for daring to contest a tax assessment, Anne Gunnell, director of tax policy and representations at the tax industry group, told an Oireachtas committee on Wednesday.
At present, while the default is that hearings before the Tax Appeals Commission are held in public, if a taxpayer requests a behind-closed-doors hearing, they must be accommodated, with any outcome of such hearings anonymised. In practice, all hearings are held in private.
Under legislation before the Oireachtas, the commissioner hearing the appeal will have the discretion over whether hearings should be held in public or private. And decisions will no longer be anonymous except in “special and limited circumstances”.
READ MORE
The Government says it is responding to a Supreme Court ruling – Zalewski v Workplace Relations Commission. The tax industry group says that judgment held only that an absolute ban on public hearings was unconstitutional – not that all meetings had to be held in public.
Any move to force appellants into public hearings will compel more taxpayers into paying a liability that they consider to have been incorrectly assessed, Gunnell told the Oireachtas Joint Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and Taoiseach.
“Genuine appellants settling prematurely, not because Revenue have the stronger legal argument, but because the commercial, privacy and reputational risk of public exposure is too high, fundamentally undermines the basis of a case being taken on merit,” she said.
“We believe it is important for the committee to note that, on average over the past four years, of the determinations issued by the Tax Appeals Commission, approximately 20 per cent were in favour of the taxpayer,” Gunnell said.
This, she said, showed that “in a significant number of cases, where a taxpayer genuinely disagrees with an assessment, pursuing an appeal leads to a different and fairer outcome”.
Are Government's fuel measures betting on a quick resolution to the conflict in Iran?
The Irish Tax Institute says that a study of 20 European Union (EU) member states shows that Ireland would be a clear outlier compared with the privacy protections that exist in the management of tax disputes elsewhere.
The EU-wide comparison shows that although most countries default to public hearings, almost all anonymise published findings of those hearings.
Gunnell noted that, when the question of public hearings on tax appeals was considered by the Oireachtas 10 years ago, Tánaiste Simon Harris, then a junior minister in the Department of Finance, said the government did not “want to have an appeals system that would in any way discourage persons from their right of appealing a decision of the Revenue Commissioners”.
Issues around taxation tend to be emotive, she told the committee, “and our members have serious concerns around how a taxpayer who has a genuine technical dispute with Revenue before the Tax Appeals Commission will be distinguished, in public, from a taxpayers who appears on the list of tax defaulters for a serious failure to comply with their tax obligations”.
