Dispute Causes in the Palestinian Income Tax Law No. 17 of the Year 2004

Dispute Causes in the Palestinian Income Tax Law No. 17 of the Year 2004 PDF

Odwan Ma’zooz Mohammad Ishtayeh

Supervisor(s)

Dr. Mohammad Sharaqa -

Discussion Commity

176 صفحة

Abstract :

Abstract It is normal that various disputes may arise regarding the application of any legislation. Consequently, the legislation will attempt to organize the suitable ways of confronting such disputes by putting forward the mechanisms related to settling them. Due to the sensitivity of the taxation issue in general including imposing of taxes and coercive collection and then having a number of concessions and exemptions, it is necessary that tax legislations should include clear delicate organizations in order to settle disputes that may arise between individuals and tax management. The present study aims at identifying the dispute causes in the Palestinian income tax law No. 17 of the year 2004. In this study, the researcher attempted to investigate the impacts of tax dispute on the stability of tax issues and their rapid solution, the influence of the related parties in causing tax disputes, their direct impact on maintaining the rights of the treasury, the extent to which taxpayers are committed to paying taxes and adhering to their duties, and their effects on tax department. To the extent that resolutions are within the law, this will have positive effects that help in laying good bases and regulations for the process of imposing taxes, implementation of deductions and exemptions, measures of tying and collecting taxes, and simplification of evidence procedures in tax disputes so as to enhance and reinforce trust bridged between taxpayers and tax department. Eventually, tax awareness and tax commitment will be enhanced. To achieve these objectives, the researcher investigated the Palestinian income tax law No. 17 of the year 2004 by using analysis methodology. He studied the available literature related to the theoretical studies about the subject. By reviewing the related literature, he was able to put forward the theoretical layout of the study. The subject will be investigated in one introductory chapter and three main chapters. In the introductory chapter, the researcher discussed the role of the state in imposing taxes, in addition to supplying the definition of tax, its objectives and characteristics, the legal basic of commitment to taxpaying, and the general regulations that govern imposing taxes. In the first chapter, I discussed the general context of tax disputes through two sections. In the first section, I discussed the idea of tax disputes, their causes, the competent jurisdiction, and the importance of having a judiciary dedicated to deal with disputes in Palestine. Accordingly, I discussed the Court of Appeal for income tax legal cases since it is the competent court. In the second section, I discussed the main part of the present study which is related to types of tax disputes in the Palestinian income taxes through the following items: · Types of disputes in identifying the taxable income. · Types of disputes in deductions of total taxable income. · Types of disputes in permitted exemptions of net income and measuring tax rate. · Types of disputes in the procedures of linking and collecting taxes imposed on taxpayers. In the second chapter, I discussed evidence procedures in tax disputes through two sections. In the first section, I discussed the general concept of evidence by providing evidence definition, its importance in tax disputes, bases of evidence and their status in tax law, written evidence and indications, and power of verdict. In the second section, I discussed the concept of tax declaration through the legal stipulations that should be evident in the declaration duty, the party to which the tax declaration is submitted, the effects of its supplying and giving up, and the position of the tax department regarding the tax declaration. In the third and last chapter, I discussed the most important amendments of the Jordanian income tax law No. 25 of the year 1964 in accordance with the Palestinian income tax law No. 17 of the year 2004. This study reached a number of findings. Tax law is subject in its application to its good use or misuse, which is the responsibility of the executive authority. Good usage is the correct criterion in achieving abundant collection and low level of tax disputes and vice versa. To the extent that legislations are fair, adaptation process becomes easier. As it is often argued, it is the results that prove the accuracy of laws and legislations. How nice it is when the executive authority resorts to achieving fair taxation and supplying psychological relief for taxpayers through correct application of the law. The researcher refers to a very serious issue related to causing tax disputes. This issue involves the tax department when granting a system of priorities in enforcing the law, a matter that violates the tax law and causes tax disputes. It is improper that regulations should surpass executive and organizational affairs in order to invent new instructions that are not included in the law in accordance with which such instructions are issued. An example of instructions that violated a direct text in the law and the regulations of the principles of legitimacy is the minister’s or his deputy’s decree to impose fixed tax upon a specific category or categories of taxpayers. In addition, the researcher demonstrated that the understanding of permissible and impermissible deductions is the essence of determining the applied tax so that they should be perfectly clear to both the assessment operator and the taxpayer. In the light of such findings, the present study reached a number of recommendation. It is essential to credit the real wages or income and the real value in determining the taxable areas when applying all types of taxes that may affect income or wealth. All methods based on arbitrary and unreal assessment in determining the values of tax areas should come to an end. It is necessary to deal with aging taxes and limit to a maximum period of three years so that the taxpayer shall not remain under the mercy of the tax department. Regarding the tax department, the researcher called for total revision of the tax department’s organization, its technologies, and methods of its work which should be updated and modernized especially towards setting up a department for tax information and raising the taxpayers’ tax awareness, in addition to the necessity of activating the role of judiciary and updating the courts that are competent in tax issues to settle the tax disputes between the citizens and the authority. Finally, I hope that this research has shed light on the dispute causes in the Palestinian income tax law No. 17 of the year 2004, while bearing in mind the unpleasant and negative connotations of taxes for taxpayers.

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