INTRODUCTION

There is a human side to taxation. Not only in its administration and policy, but also in its very nature.

Taxation was created as a result of the needs of mankind. Demands are placed on governments to provide social products which bring a measure of satisfaction to its citizens. Health care, education, roads and security are always high on the list of requirements.

In a number of countries a very high percentage of tax revenues are collected through voluntary compliance. That is the taxpayer pays his tax without the administration making a demand. However a closer examination of taxation systems would reveal that there are many strict and complex laws, including the possibility of fines and imprisonment, that support the systems.

Though often seen as harsh by the population and mainly used on delinquent taxpayers these laws contribute significantly to the development of a culture of voluntary compliance. Hardly anyone likes to pay tax. Take away the laws you also take away the country's revenue.

THE TRIANGULAR RELATIONSHIP

A well organised tax system creates a triangular relationship. The image of the human face is amongst the policy marker, the administrator and the taxpayer. Each plays a different role.

At each stage of the taxpayer's journey there are various rules, regulations, processes, procedures and laws that are applicable to varied situations. He should not travel alone.

It must be stressed that a balancing of the responsibility of the taxpayer, the directives of the policy maker and the practices of the tax administrator must intertwine and produce a blend which maintains integrity, yet create good relations and thus a "Human Face".

The question often asked is how do policy makers and tax administrators maximise revenue collection and at the same time have a human face? This can only be done by effective tax administration and policy which concentrate on known goals including that of "optimising relations with customers.

PROCESS FOR CREATING THE HUMAN FACE

• Deliberate and precise steps must be identified / undertaken to create the desire "Human Face". Such steps include:
• Factors contributing to the need for a human face
• Systems and actions necessary for planning - the human face
• Designing - the human face
• Implementation - features of the face
• Maintaining - the human face

FACTORS CONTRIBUTING TO THE NEED - FOR A HUMAN FACE

Strictness of Tax Law

In many countries including some countries in the Caribbean, the income tax system is based on self-assessment. The law places the responsibility on the taxpayer to estimate his tax liability and make a return on the prescribed form.

Though the strictness of such a law is desirable for ensuring reliable and timely collections, many taxpayers experience significant difficulties. Usually room for discussion is limited and the onus rests on the taxpayer to comply.

Other Challenges

Some other matters which taxpayers agonise over which often cause distress are:

• The difficulty of the laws to interpret
• The wide impact of tax policy
• The demand for personal and sensitive information
• The significant authority of the tax administrator
• The lack of sufficient assistance
• The unreasonable demands of tax administrators
• The lack of proper facilitation through various stages
• The cost associated with payment of tax

SYSTEMS AND ACTIONS NECESSARY FOR PLANNING - THE HUMAN FACE

Both policy maker and administrator must engage in planning the actions and system required to achieve their goal to create the Human Face. Two primary areas are customer relations and the structure of the organisation.

Customer Relations

One of the challenges of senior tax administrators is that of changing the mindset of both managers and staff. It is the belief of many persons that the Customer Service Division is the only area charged with the responsibility of optimising relations with customers. One can never hope to get the co-operation of customers if they are treated as mere payers of taxes.

Without their assistance success is diminished. The goal of optimising relations with customers should be seen as a two prong approach. Firstly the way the administration treats the customer in the day to day dealings with them and secondly what it can gain from the customer by way of full compliance and as a supplier of valuable information.

The motto for customer relations should be "every time and everywhere." Which means that all officers wherever assigned, whether working with objections, auditing or enforcement must adhere to this motto.

Structure to Facilitate

Most countries design their tax systems to accommodate their customers and make it easy for them to conduct business. The objective is to give a high quality service with a distinguished, friendly and intelligent face.

When walking through the system there should be no road blocks. Systems should be designed to facilitate typical activities undertaken which include:

• Taxpayer Registration
• Taxpayer Service/ Public Relations
• Returns Processing
• Audit
• Objections
• Collections/Revenue Management
• Enforcement

DESIGNING - THE HUMAN FACE

Confidentiality and rights of taxpayers are two fundamental elements in designing a human face in taxation.

Confidentiality

Generally speaking , persons would rather not discuss their affairs with strangers and for this reason it is important to gain the customer's trust. The policy makers have recognised this fact and have enacted rules to ensure confidentiality. When dealing with taxpayers the - 6 - administrator eases any fears by referring to the policy maker's mandate as expressed in the legislation.

In the Barbados Income Tax Act Sections 49, 50 and 51 deal with "Staff and Secrecy". Section 49 speaks of the Commissioner as the person who administers and enforces the Act and other related laws and as the person who controls and supervises all staff.

Section 51(1) states -

"The Commissioner, the members of the Income Tax Appeal Board, and the officers and other persons employed to administer and enforce this Act and other laws relating to income tax shall

(a)      maintain and aid in maintaining the secrecy of all matters relating to this Act and other laws relating to income tax which come to their knowledge and shall not communicate any such matters to any person except for the purpose of administering or enforcing this Act or any other law of Barbados, and

(b)      before they begin to perform any duty in relation to their office or employment, take and subscribe the prescribed oath of fidelity and secrecy."

Rights of Customer

Both policy maker and tax administrator have demonstrated commitment to taxpayer's rights. This is expressed in many mission statements. In Barbados the Inland Revenue Strategic Plan 2001 - 2006 has a section which deals with "Taxpayer's Rights and Entitlements"

Rights in relation to specific issues are also dealt with by the policy maker. For example Section 77 (7) states "No person shall examine or seize a document in the possession of the attorney-at-law without giving the attorney-at-law an opportunity to make a claim of attorney-client privilege in respect to that document and in respect to a named client." Also rights under Section 70A provides for the payment of interest to customers whose refunds of taxes are not delivered to them within the time prescribed.

The rights of the taxpayer is further safe guarded by the tax administrator who ensures that objections are handled by different officers from the ones who made the original assessments. During interviews customers are dealt with in a cordial manner and are allowed to present additional information/documentation and the administrative policy dictates that benefit of the doubt must go to the taxpayer. The person is also allowed to have third party representation if desired.

IMPLEMENTATION - FEATURES OF THE FACE

The Barbados situation is highlighted to demonstrate what happens when taxpayer and administrator come face to face.

Audit and Investigation

Each year some taxpayers' files are selected for further scrutiny. In modern administrations selections are made both by the computer and the officers.

In many cases the "wear and tear" appearance of the taxpayer's face is very apparent when he is informed by the administration that an audit is being conducted on his tax return. It could be a period of uncertainty, since in most cases discrepancies are found and result in increased tax liability.

Perhaps, this fear comes from the wide powers given to the tax administration by the law, for him to obtain required information. Such powers include the seizure of books and records and the examination of bank accounts. Consequently, to the taxpayer, the features of the face of the administrator might not seem pleasant.

Once again the question is how can a human face be created? How can the administrator achieve a balance? Audit activity is normally undertaken in an atmosphere which demonstrates firmness on the part of the administration. However through administrative policy guidelines a mandate is given to officers on conduct. Therefore even during such a difficult process officers are required to be fair and respect all taxpayers rights.

In addition tax officers are trained to use members of the physical face to listen attentively, watch carefully and speak-in a cordial manner. The aim of the administrator is to be fair and firm yet, maintain the dignity of the taxpayer.

Appeals and Objections

As previously stated tax administrators are guided by the mandate of the policy maker who is expressed in the Income Tax Act. This is not limited only to areas of collection but also customer's rights and concerns. Section 57(1) gives the customer the right to object if he feels he has not been treated fairly by the Commissioner.

Although there is a specific time limit set out in which an objection must be made, Section 57(6) makes provision for this period to be extended by the Commissioner.

The legislation also gives the customer the right to appeal to the Appeal Board if still not satisfied with the Commissioner's ruling, and Section 60 gives the right to appeal to the High Court. These instructions demonstrate some pleasant features of the policy maker's face.

MAINTAINING THE HUMAN FACE

Once a face has been created it should be maintained. Dissemination of information and payment tools are vital in this area.

Dissemination of Information

The dissemination of information to customers should be a priority for any tax administration and there are several methods employed to do this. Some of the more common means of doing this are by way of brochures, the telephone, radio and television, the print media, information letters and circulars. More recently tax officials have seen - 10 - the need to employ other tools in an effort to gain an even better relationship with their customers.

Out-reach programmes, including the use of help desks at various locations around the country, tax fairs and the use of web sites have proven effective in achieving this goal. These more recent methods also give the administrator the added advantage of getting responses from members of the public who would not normally visit the tax office.

In Barbados a recent innovation has been the 'Tax Fair'. This has allowed the Administrator the opportunity to "ply his trade" in an open friendly atmosphere away from the confines of the office. Located in Heroes' Square, the customer is enticed in a colourful setting by the melodic tones of steel pan music and is greeted in an atmosphere more reminiscent of a bazaar than a tax office. Tax administrator and customer interact in a less stressful environment where knowledgeable officers give any needed assistance. This occasion is also used as a forum to hand out brochures and give lectures on relevant topics.

Payment Tools

The tax administrator is armed with several tools which are all geared to lessen the burden of compliance for the customer and it is important that the taxpayer be made aware of these. Pay as You Earn is one such tool which allows the employee to pay his tax liability incrementally rather than being faced with a large tax bill at the end of the year. Prepayment of taxes for self-employed individuals and withholding tax are also designed with a similar purpose in mind.

The impact of these tools is a more reliable cash flow for government and the perception of the taxpayer that the policy maker and administrator have "made it easy to pay." Thus all faces, policy maker, tax administrator and taxpayers show satisfied countenances.

CONCLUSION

Taxation of citizens could be conducted in an environment that is unfriendly and combative. Such a condition is usually fortified by strict and complex laws and robust administration. The question is do taxpayers give the maximum co-operation under such a regime? The available data do not suggest this.

This paper shows how actions of the policy makers and tax administrators could lighten many uncomfortable moments experienced by the taxpayer. It also shows that creating a human face for tax policy and administration does not compromise the integrity of tax collectors. It strengthens relationships. Thus resulting in better tax compliance.