August 01, 2019
July 13, 2019 is the 12th anniversary of justice served for Tai Ji Men. In fact, it is sad to say "It is an anniversary with no justice served." On that day, "Seminar in Commemoration of the 12th Anniversary of Justice Served for Tai Ji Men" was jointly held by the Association of World Citizens and other 14 domestic and foreign non-governmental organizations in International Conference Hall Tsai Lecture Hall, College of Law, National Taiwan University. The 5th session of this seminar that was presented in English has invited experts, scholars and people from all walks of life to discuss the issues of oppressive tax system in Taiwan and submit specific suggestions.
Hendrick Lam, Senior Vice President of a listed company, indicated that taxpayer’s human rights are pushed forward globally, but Taiwan’s tax authorities badly bully taxpayers instead. Among the tax case, Tai Ji Men case was the most representative one. It has been 23 years since this case brought to the court. Ludicrously, the Supreme Court rendered a final decision on July 13, 2007 which concluded Tai Ji Men was not guilty with no tax evasion and also confirmed "the red envelops provided by the disciples to the master were monetary gifts and tax-free income under Article 4, Subparagraph 17 of the Income Tax Act" and "items such as uniforms for practicing qigong which were collectively procured by a few disciples on behalf of others were not profit-oriented sales", it was nothing to do with the master and his wife. All innocent individuals detained for the criminal portion of this case received national compensation for wrongful detention. Nevertheless, the illegal tax bills issued by National Taxation Bureau are still abusing people. Hendrick Lam mentioned that American taxpayers have ever experienced the dark ages of abuses by the IRS, but the government ended it by Taxpayer Bill of Rights. Lam sees Tai Ji Men case from the perspective of Taxpayer Bill of Rights in the US. He pointed out that taxation should be under a reasonable balance between government expenditure and taxpayer affordability. It would be direct deprivation of people's property rights if the tax authority does not collect taxes properly. The Constitution of the Republic of China expressly stipulates the principle of taxation by law. The government must levy taxes on legal basis and people have rights and obligations to pay taxes pursuant to law. The third instance criminal decision affirmed that Tai Ji Men was not guilty and committed no tax evasion. The red envelops were monetary gifts and tax-free incomes without tax concerns, but the NTB still issued illegal tax bills.
Hendrick Lam emphasized that there have been no independent tax courts or tax professional judges for tax lawsuits in Taiwan. The failure rate for taxpayers of tax litigation in Taiwan is up to 94%; therefore the administrative court is called as "the court of loosing cases". Moreover, some judges even "forget" the evidence favorable to the people. It is absolutely bending judgment and against the principle of fair trial. Bjorn Tarras-Wahlberg, the President, Secretary general and Founder at WTA (World Taxpayers Association) has said that the taxpayer’s rights are neglected in Taiwan. The government should pay attention and establish a better system of taxpayer right protection to build up a true court with expertise in tax. Mark Dodds, Vice President of Tax & Super Australia, also has stated that Taiwan’s status is very unusual. It should reform the judge and judicial system and keep the judges with no related expertise away from tax litigation.
Charlotte Lee, an observer of Commission on Human Rights, Association of World Citizens (Taiwan), stated that while the taxation agencies possess excessively discretionary power, the judicial relief system could not function effectively to check and balance the administrative abuses; furthermore the legislative power failed to perform legislation and supervision. The separation of powers under constitutional framework could not work validly, all of which causes the violation of due process, infringement of fundamental civil rights and violation of two international Covenants. The Tai Ji Men tax case would be the most typical one in tax malpractice.
Charlotte Lee emphasized that Tai Ji Men tax case, which is delayed 23 years, is the epitome of all cases under the Taiwan taxation system. Through reviewing this case, the government should correct and reverse the system's malpractices. For instance, the government should make Taiwan’s taxpayer’s rights to meet international standards by canceling tax bonus, adopting outside expert reviews on administrative ordinances, establishing appropriate mechanisms to select professional tax judges, and resolving unjust cases. She attended the 17th World Taxpayers Conference in Australia in May 2019. She told WTA Chairman John O'Connell about Taiwan's current difficulties about the judicial and legislative power not being able to check and balance tax authorities. Mr. O’Connell also mentioned the solution lies in the participation of the people and tax reform groups. The people and tax reform groups must actively participate in election campaigns, elect competent officials, stand on the taxpayer's side, request officials to hear taxpayers' opinions, and take actions. As to facing with current government’s dereliction of duty, Charlotte Lee urged everyone in Taiwan to have strong awareness of civic rights and fight for taxpayers’ rights. In so doing, the people can monitor the government to reform the ineffective system and prevent the abuse of power to tax, and then they can enjoy true freedom.
As an accountant and a volunteer of Tax & Legal Reform League, Shelly Tu pointed out it is already an open secret among companies that the NTB forces them to negotiate tax amount by means of illegal investigation and taxation. The academic community criticizes that it has too much administrative discretion. This kind of opaque and unstable tax system causes considerable harm to Taiwan’s economy and the development of enterprises. The Ministry of Finance allots tax bonuses based on the performance of tax collection. Therefore, the core value of tax system in Taiwan is tax revenue, not the protection of the rights and interests of the taxpayers. In other words, the tax incentives not only encourage malicious tax audits, but also result in the antagonism between tax organs and the people. Board of Director of Tax & Super Australia, Stephen Ware mentioned there is no tax bonus in Australia and that should not exist. The founder and president of Americans for Tax Reform, Grover Norquist also pointed out that the tax agents have got paid; they have no ground of taking any bonus. The former president of World Taxpayers Associations (WTA), Staffan Wennberg even reminded that it is completely wrong to have tax bonus; the tax agencies should at service for taxpayers, and there should be no such problems like conflicts between the tax agency and the taxpayer caused by tax bonus. Unfortunately, in January this year (2019), the Legislative Yuan of Taiwan still passed 130 million (TWD) bonuses which do not have legal empowerment.
Julian Cheng, executive director of international property management, said the law is to regulate conducts, but how can we be sure that the government fulfills its commitment or corrects its errors? Having laws is not equal having the rule of law; Julian Cheng emphasized that the universal principles of the rule of law is to have a responsible, fair, and transparent government which settles disputes fairly. However, in the Tai Ji Men tax case, the tax agency not only failed to do its job well, but also hid, fabricated the evidence, and no one was held accountable by the law. The power to tax must be clearly defined and used carefully; however, many of the tax agencies use their power according to the administrative interpretations. Tax agencies can even restrict taxpayers from leaving the country without a court decision. Julian Cheng said this seriously violated the rule of law. The Tai Ji Men tax case has been delayed for 23 years, which is against timely, fair and binding settlement of dispute. Tai Ji Men’s victory in the administrative court is also useless. The everlasting tax bills result from lack of binding power of a third party.
The Tai Ji Men tax case has been delayed for 23 years and has not yet been resolved. Dr. Lukas Lien, the host of the conference, said that maybe God endows Tai Ji Men the mission to uphold taxpayer’s rights in Taiwan, to reflect the serious flaws in the tax system in Taiwan and to urge the government to push forward legal and tax reform so that the younger generation can have a bright future! It is expected that the government will carry out transitional justice and rectify unjust cases to prevent the people from suffering and bring them a living environment of security.
Picture 1: “Proposed Reform for Tax and Legal Regime, Seminar in Commemoration of the 12th Anniversary of Justice Served for Tai Ji Men” on July 13, 2019. Experts and scholars from all walks of life in Taiwan have jointly called on the government to implement the transitional justice and rectify unjust cases to prevent the people from suffering and bring them a living environment of security.
Picture 2: Lukas Lien, professor of University of Osnabrück, Germany (middle), Hendrick Lam, senior vice president of a listed company (second from right), Charlotte Lee, an observer of Commission on Human Rights, Association of World Citizens (Taiwan) (second from left), Shelly Tu, an accountant and a volunteer of Tax & Legal Reform League (first from right) and Julian Cheng, executive director of international property management (first from left). The above experts attended the seminar to give critiques of the serious flaws of Taiwan’s tax system and put forward concrete suggestions.