Rule of law in taxation: Rights before revenue - Part 3

PARTS 1 and 2 of this article highlighted two fundamental rights of taxpayers: the Right to Know the Legal Basis for Taxation, and the Right to Know the Reasons for an Amended or Additional Assessment.

- By N.M.M. Mifly

It must be reiterated that when taxpayer rights are violated, the resulting official actions—and in particular tax assessments—stand to be nullified and set aside, for taxpayer rights take precedence over the taxing power of the State agencies, be it the Inland Revenue Department (IRD), Customs Department and others. Unfortunately, many taxpayers remain indifferent to their rights. Equally regrettable is the fact that numerous tax advisors and consultants are either unaware of these rights or reluctant to educate their clients about their significance for various reasons.

Scope extends beyond the IRD to all revenue-earning agencies

As reiterated in the previous parts the scope of this discussion is not confined solely to the IRD. The terms tax, taxpayer, tax officials, and related expressions used herein are intended to extend beyond the IRD. As emphasised in Part 1:

“Since IRD-collected taxes cover a wide portion of the population and account for the largest share of government revenue, both taxpayers and tax officials of the IRD have been taken as the primary focus for illustration.”

Therefore, readers are respectfully requested to interpret “tax” and “taxation” in a broader sense, encompassing not only the IRD but also the Departments of Customs and Excise, depending on the context.

The right to fair and honest treatment

Another fundamental right of taxpayers, recognised both locally and internationally, is the Right to Fair and Honest Treatment in all dealings with the tax authority. This right reflects the principle that taxation must be administered with integrity, impartiality, and accountability, ensuring that taxpayers are treated not merely as sources of revenue but as citizens entitled to dignity and justice.