The Israeli Tax Authority (ITA) published a new Code of Ethics on July 4. It is said to be based on the best practices abroad.
What’s in it and what’s in it for us? ITA director Moshe Asher explains the code as an “identity card of values,” and warns it won’t solve all dilemmas, but it gives a toolbox of conceptual rules that will help us all reach a solution.
The code points out that the extent of the ITA’s responsibility and broad powers necessitate adherence to a high ethical level.
The ITA’s code augments a more general public sector ethical code and applies to all ITA employees. Adherence to the code should increase public confidence in the ITA.
Vision and goals:
The ITA strives to operate efficiently in enforcing tax collection, offering efficient and quality service, by instilling human capital in the organization as well as commitment and social values to the payment of the right tax.
The ITA says it goals include: meeting revenue targets, enhancing enforcement and extending tax collection, dealing and promoting human capital, promoting growth, improving deterrence, eliminating bottlenecks and improving service to citizens and improving work procedures.
Dignified stately role:
ITA personnel are state representatives and faithful to the public. They should act in the public interest with a feeling of national mission.Professionalism:
ITA personnel operate in a complex field requiring expertise and deep understanding. They should act professionally and responsibly according to the law with a view to achieving their goals. This means pursuing excellence, taking advice, having an open mind and professional development.Appropriate and decent conduct:
ITA personnel shall act to collect the right tax only, maintaining equity, applying appropriate authority, avoiding any conflict of interest or corruption. They must report to their superiors, maintain data security, set a personal example, be fair to suppliers and their employees, be efficient and useful, and look after state property entrusted to them in an environmentally friendly way (not explained).Cooperation and mutual respect:
A comfortable supportive environment is a prerequisite for correct behavior and calm personnel.Service culture:
The ITA sees the giving of quality beneficial service to the public as a core value. ITA personnel are instructed to give efficient useful service and to refrain from causing delay or burden to “clients” (apparently taxpayers) and to give inquirers clear, reliable and accurate information about their rights and how to materialize them. Moreover, ITA personnel should adapt their service for people with difficulties in sorting things out, such as olim, tourists, the disabled and IDF reservists.
Management personnel are instructed to set a good example regarding personnel behavior.Ethics in theory and in practice:
The Code of Ethics has an interesting chapter on dealing with ethical dilemmas. This means deciding what to do when answering an inquiry where two ethical values contradict each other. In this situation, discretion is needed in giving preference to one ethical value over another. This entails ranking them in order to take the most appropriate decision. As a rule of thumb, the code lists the following “normative tests”: what’s legal; what’s professional; what’s good for the ITA’s image; the public test and the personal test.
The public test involves weighing whether the decision and action are fair, non-discriminatory, and free of extraneous factors. Does this fit in with the ITA’s obligations? Can it be carried out decently and according to the code? The personal test is telling. The ITA official must ask himself or herself: “How would I feel if knowledge of the decision were to be published in the press and on online media? Can I sleep well at night? Would I expect my children to act this way?” Comments:
A few things appear to be missing.
First, the code apparently makes no mention of the need to observe the Taxpayer’s Charter of September 12, 1991.
Second, there is no mention of the need to apply the principles of good administration and natural justice – failure to uphold these principles are grounds for complaint to the State Ombudsman.
Third, there is no mention of the need to uphold Israel’s macroeconomic interests and international commitments – experience suggests that ITA officials only care about collecting tax.
Fourth, some tax officials tend to assume the taxpayer is taxable unless the opposite is proven – leaving the taxpayer to prove that is not the case – proving a nothing isn’t easy.
Fifth, the ITA has developed a bad habit of imposing hefty fines and freezing bank accounts, pensions and car ownership, often without warning.
Last but not least, some tax officials are plain old rude and have a habit of yelling even in cases involving good faith – this deserves to be roundly criticized in the code.
On the other hand, it must be emphasized that many tax officials are fine to work with and always apply ethical principles.
What about accountants and tax advisers? They have their own ethical rules.
In practice, a good adviser should smile and keep calm, like a bridge over troubled water.
As always, consult experienced tax advisers in each country at an early stage in specific cases.
firstname.lastname@example.org The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.