Dispute Management

The dispute management function should commence from policies and measures to prevent or minimize disputes to their efficient and satisfactory resolution. Advanced tax administrations have a dedicated organization for dispute management that functions with independence so that a taxpayer has confidence in the administration’s objectivity and fairness. It should ensure that avoidable disputes are not generated and only exceptionally, cases escalate to litigation. Operating procedures should be transparent and made available to taxpayers. Tax administrations may issue binding technical guidance to ensure clarity and consistency in interpretation and application of law and to enhance taxpayer understanding of it. Pre-dispute consultation and pre-filing support together with high-quality show cause notices and tax demands are complementary instruments. Advance ruling and mutual agreement procedures (MAP) prevent disputes. Alternative dispute resolution (ADR) methods are employed to resolve tax disputes out of court including settlement commissions and arbitration mechanisms. They should incorporate administrative and appellate level functions. For success, dispute resolution requires officers with relevant knowledge, expertise and maturity. Assigned officers should receive adequate induction and on-the-job training in the principles of law and jurisprudence, principles of statutory interpretation, theory of precedents and principles of evidence. These aspects comprise the subject matter of this chapter.