Burden of Proof in Tax Disputes: Ethiopia  

 

Introduction

Burden of proof in tax disputes could rest either on the tax payer or on the tax authority or sometimes both could bear the burden of proof. For instance under the United States and Canadian tax laws the primary burden of producing an adequate evidence to rebut the assessment or decision of the tax authority rests on the tax payer. On the other hand countries like Sweden, Netherlands and Spain in their tax laws share the burden of proof in tax disputes between the tax payer and the tax authority. Hence in these counties the burden of proof in tax disputes is shared between the litigating parties.  As such the tax inspector must deduce evidence for a profit adjustment and on the other the tax payer must substantiate an exemption or deduction alleged. To the contrary tax laws in Denmark, France and Finland locate the burden of proving the accuracy of the tax decisions made according to estimation on the tax authority.  Similarly in Hungary the tax authority is obliged to prove the bad faith of the tax payer when prohibiting the deduction on VAT. This shows that there are possibilities where by tax authorities could bear the burden of proof in tax disputes.

 

In Ethiopian context when tax disputes arise the first venue to visit by the tax payer is the tax review committee structured with in the tax authority. Its role is just to give recommendation to the tax authority. The next body available for aggrieved tax payers is the federal tax appeal commission, found outside of the tax authority and enjoys a relative autonomy and independence. Then the federal high court comes to picture at this point as a next step available for aggrieved tax payers.  Up to this point the ordinary court of the country does not involve itself in tax disputes. 

Continue reading
  6465 Hits