Abstract
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Tax compliance represents extent to which taxpayers comply with tax law. Widespread view among tax scholars reveals that law enforcement is not the reason for paying taxes, while penalty for ordinary tax convictions is small and probability of detection is trivial. There are several factors influencing intensity of compliance, like degree of tax burden, purpose of expenditures funded by collected revenues, form of taxation, public perception on whether tax system is fair or not, etc. Based on these scientific findings, countries began introducing “alternative” approaches in relationship with taxpayers. Besides traditional hierarchical authority-taxpayer relationship, concept of co-operative tax compliance based on monitoring, forecasting and preventing the appearing problems is introduced. Parallel, the “enhanced relationship” concept began appearing at the OECD level.
National tax authorities are forced to manage tax risks, primarily stemming from legal environment created by laws, international agreements, and theirs interpretation. Opposed to past systems, focusing entirely on legality, todays legal environment strives for lawful and legitimate authority, which in the broadest sense is called good public governance or good administration (GA). It is more partnership-like, preventive, open, co-operative, responsible, and decentralised public administration, which, however, still strives for the efficiency of authority and society as a whole by virtue of the parallel corrective measures of coercion and coordination.
Emphasis of voluntary tax compliance instrument can be based on the above characteristics of GA. Main idea is to improve relations between taxpayers and tax authorities and increase transparency and co-operation in a way to resolve tax issues in timely manner. Inclusion in these programmes is encouraged by tax authority, which primarily monitors scope and quality of taxpayer’s internal tax controls during the inclusion while taking into account tax risks. Taxpayer is expected to reveal uncertainty of their tax position to the authority in return for a timely resolution of issues. The concept of “uncertainty of tax position” represents all business activities taxpayer is involved in and for which seeks to obtain any tax advantages that are not substantiated by formal tax audit. These advantages include anything that reduces tax payment. Uncertain tax position can arise from openness or ambiguity of legislation relating to such position of the taxpayer, especially in terms of established tax facts. It may also refer to confusion in calculating tax base arising from such circumstances affecting the taxpayer.
Instrument of voluntary tax compliance was introduced in Slovenia in 2015 and is available to medium-sized and large taxpayers (Article 99 of Financial Administration Act). Main objective of our paper is to detect its pros and cons in terms of respecting and implementing rule of law. Character of research is exploratory; therefore, qualitative empirical method will be applied. The main data collection technique shall focus on in-depth interviews with experts, mainly tax consultants. Research will focus on how this instrument contributes to respect of rule of law and related principles of GA, e.g. transparency, accountability, efficiency etc. in practice. Limitations of our research reflect that only 11 taxpayers have applied to this instrument, while element of originality can be detected in pioneer attempt to reveal potential and realized threats of violation of basic law postulate – rule of law.
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