As is known, most Lebanese complain about the tax system adopted and complain of its burden and unfairness, as well as resentment of the limited and poor public services and investments that are required to be provided by the public authorities in return for the contribution of the taxpayer, because the tax is in his favor and not at his expense. However, this fact should not obscure the lack of knowledge and familiarity with the origins and details of the tax system. Indeed sociological reasons inherited over generations, citizens often value the value of service less than tax. Thus, this reality indicates that there is a lack of knowledge and tax savviness among the Lebanese, as well as the failure of the state in the services it provides, and therefore the urgent need to strengthen financial literacy and tax citizenship.
Actually, the main role of the tax is to achieve a fair redistribution of national wealth and national income at the level of the Lebanese society, as well as to ensure social development, welfare and job security in order to attain a productive economy and sustainable development.
Thus, any serious effort to activate and improve the collection and development of the regulations as well as to expand the taxpayers base in order to enable the state to complete its regulatory role, requires that it be accompanied by an endeavor to establish and implement the principles of transparency and accountability with a view to restore confidence in institutions and the application of assets; especially since tax is known as a mechanism to limit the freedom of use private money as a matter of coercion by the public authority, which is met by a firm conviction under the voluntary obligation of the citizen to implement his obligations and tax obligations, which fall within the framework of State funding for the performance of its functions in the provision of public services and the maintenance of social contract (Partner State). Thus, it becomes urgent for the State to strive for an environment conducive to the development of civic thought and a sense of taxation through a new, different approach and other parallel measures that will have a positive impact on citizens. The first is the practical measures that should be taken by the public authorities to provide the public with the necessary information, simplify the regulations and procedures of taxation, enhance transparency in public finances, improve treatment and communication as well as to change the citizens’ perception of taxation in terms of justice, legality and fairness. Therefore, maintaining the link between taxation and government spending should be transparent and consistent by publicly disclosing all details, facilitating rapid access to information and activating control, as well as external auditing of public accounts when necessary or in times of need to stimulate accountability. On the basis of all the above, it becomes urgent to adopt a chart for the taxpayer that summarizes in a clear and fundamental manner the rights and obligations of the taxpayer towards the public authorities with a set of principles that strike a fair and equal balance between the public service and the role of the tax administration on the one hand and the expectations of the legitimate taxpayers on the other. The taxpayer has been defined under the Tax Procedure Law as: “Everyone who is bound by tax commitments under tax laws …”, which leads to the consideration of a Lebanese resident citizen or foreign resident or who carries out a taxable work in Lebanon from among the taxpayers subject to applicable laws and regulations.
Principles:
Section I: Tax goals and objectives. 1. Taxation is linked to Fiscal citizenship and should be defined as a voluntary and spontaneous execution by citizens or residents of their tax and fiscal obligations. In other words, the tax is a social debt laying on the taxpayer with direct compensation. This will guarantee the concept of the Partner State and strengthen Social Contract. 2. Taxation is an investment factor in and to and from the taxpayer, whether a Lebanese citizen or resident, and therefore requires voluntary performance in the context of an ongoing assessment, monitoring and accountability process. 3. The aim of taxes is to secure state resources that allow the operation of its services, the provision of public services and the implementation of economic policies for sustainable development, and finally the fair redistribution of wealth in all forms (education, health, social security, retirement, culture, etc.).
Section II: Rights and Obligations of the State.
1. Pursuant to the established constitutional principles, taxes are imposed under comprehensive laws whose provisions apply to all Lebanese territory without exception and without retroactive effect that violates the principle of free economic order and impairs legal stability. Thus, it is prohibited to impose taxes on certain categories of other categories that are in the same legal status. 2. Since taxation leads to Fiscal citizenship and is a voluntary and spontaneous execution by citizens or residents of their tax and fiscal obligations, tax administration is entitled to conduct any necessary inspections and controls by all available legal means and without discretion in order to secure and validate tax compliance and tax returns.
3. Tax laws and legislation must be built on fairness both: vertically, by imposing a progressive tax on the total income of individuals in accordance with the real financial capacities of the taxpayer, as well as horizontally, so that all those who are in a given situation be given the same tax treatment and without any class assignment. “Discriminatory positives” shall remain the sole exception to the foregoing, since they are intended to benefit certain categories of tax exemptions and privileges justified by social factors and / or circumstances and / or social or economic motives and by and under the supervision of the legislative authority (Parliament) representing popular legitimacy. 4. The tax administration must adopt the “presumption of sincerity” because the tax is based on the principle of the “declarative scheme” or the so-called self-assignment system, which considers the taxpayer to be honest and reliable until the contrary is demonstrated by probe and commissioning. 5. The tax administration shall be guided in its action by the public interest only and is compelled to treat all taxpayers equally. It shall also ensure the application of laws, regulations, decrees, instructions, circulars and tax memoranda in force without any deviation, violation or negligence, and under the Constitution. 6. The tax administration shall, prior to the initiation of any examination and field audit of the taxpayer’s registers and activities, and under the threat of invalidity, hand over a taxable guide called the “Charte du contributible vérifié” meaning “Verified taxpayer’s charter” which includes a very simplistic mechanism of tax procedures and the most prominent rights and obligations; to be signed by acknowledgment and receipt. 7. The public authorities shall assist the taxpayer in identifying the tax laws, rules and procedures, with the consequent knowledge of the duties of the taxpayer and his obligations towards the Treasury, in order to strengthen the conviction of the taxpayer of the usefulness of contributing to the public interest. It also requires facilitating the procedures and overcoming the difficulties faced by the taxpayer, especially those relating to the principles of tax calculation, authorization and performance. Section III: Rights and obligations of the taxpayer. 1. The taxpayer acknowledges the lawfulness of taxation and connected fiscal duties which are essential and beneficial to public interest. 2. All taxpayers shall, without distinction or exception, have full and equal adherence to tax assets and regulations. The tax administration, for its part, must apply the same assets and standards to taxpayers, thus preventing unjustified settlements and exemptions that stimulate tax evasion and promote a sense of injustice and inequality. 3. Each taxpayer shall pay his taxes without any increase or decrease, which leads to the imposition of no tax or collection only with the availability of the incident that creates them. 4. Any taxpayer shall have the right, without any form of discrimination, to object to any unfair assignment and to discuss it by presenting its arguments and defenses. On the other hand, the tax administration should not abuse the authority and should strive to provide justified and clear response to the arguments and observations raised by the taxpayer and without exceeding the legal deadlines, under the application of measures and disciplinary sanctions without discrimination or favoritism. 5. The taxpayer shall have the right to keep the tax administration and its representatives confidential about the information that is reviewed in the process of study and commissioning. Such information must be used exclusively for tax purposes related to the subject of commission only under the charge of accountability and prosecution on the basis of specific articles of the Tax Procedure Code. 6. In order to activate constructive cooperation between the tax administration and taxpayers and to stimulate tax compliance, the principle of contractual tax liability (Tax Ruling), which predetermines the assets of taxation for special cases to be presented prior to implementation, should be introduced in the Lebanese fiscal legislation. 7. Without prejudice to any form of discrimination, any taxpayer shall have the right to participate, directly or through his representatives, in the debate on the application and imposition of the tax, as well as on its use and the monitoring of good use, in accordance with the principles of the Constitution and the Universal Declaration of Human Rights. Based on this, the state should allocate space on its network and its websites for discussion and consultation on the proposed bills as well as the proposed regulations, while ensuring that the public is informed of the positive reasons and objectives. As a result of these consultations, a summary of the results and proposals will be written for publication[1].
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[1] It is prohibited to copy, print, record, photograph, translate, quote, amend, modify or adapt this document by any means, or use any copied or reproduced part of it without the prior written permission of the copyright owner.