In order to facilitate taxpayers to comply, taxpayers have rights and obligations. One such right is the right to have a fair hearing in tax related disputes. A fair hearing means that a taxpayer has the right to be heard by a higher administrative body or bodies, and to be given sufficient time to prepare to lodge his claim. All such rights are legislated in the relevant tax laws of various countries.
In order to facilitate taxpayers to comply, taxpayers have rights and obligations. One such right is the right to have a fair hearing in tax related disputes. A fair hearing means that a taxpayer has the right to be heard by a higher administrative body or bodies, and to be given sufficient time to prepare to lodge his claim. All such rights are legislated in the relevant tax laws of various countries.
Under Rwandan tax procedure law, taxpayers have the right to appeal against a notice of assessment within a period of 30 days, on receipt of said notice of assessment.
The law requires that an appeal fulfills the following conditions:be in writing, identify the taxpayer’s name and taxpayer identification number (TIN);indicate the relevant tax period;indicate assessment, object and grounds of appeal the appeal has to be signed by taxpayer’s legal representative or his or representative with power of attorney;an appeal should contain all proofs and legal arguments against the assessment.
When you appeal, the law requires that you pay the tax assessed; however, the Commissioner General has powers to suspend payment of that tax in dispute, for the duration of appeal.
The law also provides that the tax administration has to respond to the taxpayer on his appeal within a period of 30 days. This period can be extended to more 30 days, and after this time, there is no further extension. During this extension, the tax administration has to inform the taxpayer concerned, that there is an extension of such a sort.
Once no communication has been heard from the tax administration, then the taxpayer’s appeal is deemed to have been considered and you are automatically relieved of the tax liability which you appealed against. This is so, if no response has been sent to you within the 30 or 60 days mentioned above. However, once the tax administration disallows or allows your claim in part, you are free to appeal against such a decision to competent courts within a period of 30 days, effective from when the decision is delivered to you.
Dos and Don’ts
You should appeal against an assessment only if you find it necessary. It is important that you agree with your advisors on which way to go.
Since most disagreements start during audit process, taxpayers should endeavor to have their legal Counsel present especially when some disagreements start arising. Some taxpayers prefer involving their Counsels during the appeals time.
If you decide to lodge an appeal, please do it at your earliest. For those who decide to wait for the last minute, this is dangerous, as you may have time constraint, and your appeal may not be honored simply because you submitted it late.
Make sure you address your appeal to the appropriate authority, i.e. Commissioner General, and not any other person in the tax administration. If you address your claim to a different person, your appeal will be handled like ordinary mails, and this may not help you in any way especially when it is rejected. By the time you decide to lodge an appeal, you may not have sufficient time.
Sometimes, you may dispute part of tax, then pay the amount which you have not disputed, otherwise, you will be required to pay interest of late payment;
If you decide not to pursue an appeal process, and instead opt to seek for negotiated settlement with the tax administration, this is good, but negotiations may take quite long, that you cannot predict when a compromise will be attained. Sometimes, such negotiations do not bear good results, what recourse do you have before you next?
You may have none, other than seeking installment payment. So, ensure that your "forecast” is precise.
When you opt to pay tax as the appeals process goes on, and it happens that you are liberated from the tax liability in whole or in part, you are liable to be paid interest on the excess amount you paid, it is your legal right. Note that you need to ask for that interest; otherwise it is not implied;
When tax in dispute has elements of international tax (cross border), then seek advice and support from persons who specialized in this field.
As we indicated above, these are just tax tips, and this article should not be construed as a legal advice, you can only cite it to the extent that the law permits. This article and more others are available on the following website:
The writer is a managing partner/Consultant at Millennium Law Chambers, and he can be accessed via this email.