The relationship between the taxpayer and the Commissioner of Inland Revenue under the Income Tax Acts

Abstract

This thesis proposes to identify and analyse the salient features that make up the relationship between the taxpayer and the Commissioner of Inland Revenue where the collection and enforcement of income tax legislation is concerned. Chapter 1 provides a concise introduction to the concept of taxation and its purposes together with a brief historical overview of the manner in which income tax legislation came into being in Malta. This is followed by an examination of what constitutes tax evasion, tax avoidance and tax planning in the first part of Chapter 2. In its second part, this chapter delves into some of the measures that have been implemented by the Maltese Government to curtail and limit tax evasion and tax avoidance practices. The concluding part enters into a brief comparative study of how other jurisdictions have sought to solve problems of evasion and avoidance. Chapter 3 identifies who the main and peripheral parties in the relationship under review are. Particular importance is devoted to the concepts of domicile and residence as the criteria upon which the taxpayer's liability to tax is founded under Maltese law. The nature of the administrative discretion vested in the Commissioner of Inland Revenue as well as his functions in the administration of income tax are also scrutinized. The Board of Special Commissioners, the Court of Appeal in its Inferior Jurisdiction and the Tax Compliance Unit play a peripheral, but nonetheless fundamental role, in the relationship. Their composition and functions are hence analysed. The rights enjoyed by the taxpayer and the Commissioner as well as the corresponding obligations by which they are bound throughout the various stages of their relationship are evaluated in Chapter 4. This chapter also seeks to identify the remedies to which the taxpayer may be entitled in case any grievance is suffered. Chapter 5 questions whether judicial review of administrative action could constitute another avenue through which an aggrieved taxpayer may seek redress if the ordinary machinery proves to be unsuccessful. Finally, Chapter 6 embarks upon an appraisal of the human rights provisions that safeguard the taxpayer throughout his relationship with the Commissioner as contemplated in the Maltese Constitution and the European Convention for the Protection of Human Rights and Fundamental Freedoms. Concluding remarks and proposals for reform are submitted in the final chapter.