The taxation management of tax collection belongs to the downstream logistics support operation in the collection operation process, including a series of workflows, such as tax collection, tax distribution, tax refund procedures, arrears tax safeguards, liquidation, bankruptcy declaration creditor’s rights, additional tax levied for violations, administrative remedies, and other administrative operations, collectively referred to as “levy & collection management”.
Levy & collection of taxes is closely related to the rights and interests of taxpayers. Due to socio-economic factors and the design of the tax system, the proportion of income tax in government tax revenue has increased year by year. As such, taxpayers want the government to effectively control human errors, strengthen the digitization of levy & collection management, and provide more convenient and effective tax services.
When the Fiscal Information Agency (FIA) of the Ministry of Finance (MOF) was founded, each tax collection system was developed according to separate requirements. As a result, there was a lack of standardization across various tax bills and bill formats, as well as accounting subject codes and levy & collection management systems for tax collection. Therefore, in 1984, the Ministry of Finance (MOF) instructed its subordinates, Taxation Administration and the Fiscal Information Agency (FIA), to convene relevant agencies to jointly establish a “Ministry of Finance Unified Planning Group for Levy & Collection Management” to develop a unified levy & collection management system for tax collection agencies.
Since levy & collection management involves multiple agencies, only through good communication and coordination can consensus be reached and common ground be found across differences.
Agencies jointly studied and analyzed the relevant operation processes, and after completing the levy & collection management operation directions manual, further planned the computer operation system, in-placed local processing system, divided into related subsystems of “Levy Accounting”, “Tax Collection Management”, “Tax Cancellation Management”, “Tax Distribution Management”, “Tax Refund Management”, and “Tax Arrears Management”. In addition, the central collection system was built in the Ministry of Finance, connecting the two systems through the taxation computer network.
From May 1987 to March 1989, the planning team selected Taipei City Revenues Service and New Taipei County Revenue Service Office to test run systems such as Tax Distribution Management, Tax Cancellation Management, Tax Arrears Management, and Tax Refund Management. After the pilot run had been completed, the systems were officially launched. The system unifies various tax bills and management codes, while improving the efficiency of tax distribution and tax payment cancellation. At the same time, for tax arrears processes, it establishes index files for data on tax arrears and automates relevant processes, which strengthens government tax arrears collection and enforcement. With computer monitoring and control of the tax refund management system, the processing time for tax refund can be sped up and taxpayer rights and interests and fully protected.
Since April 1988, the Ministry of Finance promoted the automation of levy & collection of taxes and accounting systems, and unified the basis and principles of taxation and tax statistics in business, management, and accounting units, standardizing the data reported by each unit. Another 18 types of accounting data that were originally prepared manually can be directly generated through the computer to generate vouchers, saving time and improving accuracy. Various levy & collection management information is also provided to other government agencies. For example, immigration management agencies can target large tax debtors and restrict their entries and exits, to improve the effectiveness of government tax collection.
In 1997, in conjunction with the transfer plan of the national taxation information operation platform, the digitization of levy & collection management was further improved. The Ministry of Finance established a tax service system through which taxpayers can apply for tax payment certificates and non-tax arrears certificates across regions. By integrating national & local levy collection systems, the cross-regional verification and issuance of various tax payment certificate services are provided. The levy & collection management system was also connected to the network of the administrative enforcement agency of the district court, and tax bills can be directly printed and calculated for late payment fees by the National Taxation Bureau personnel stationed in the enforcement agency. The system was officially put into operation in May and June of 2001. The role of the Fiscal Information Agency (FIA) has transformed from direct program development in the early stage, to more efficient outsourcing control and management. By utilizing the competitive advantages of the domestic information service industry, it saves personnel costs and accelerates various system development schedules.
Coordinating with the New Government Accounting Theory and Statement of Financial Accounting Standards in 2008 to revise the accounting system, the accounting basis of levy was changed to “revised accrual basis”, and added estimated tax receivable, provision for dead tax, deferred income and estimation until the end of the year (that is, the end of February of the next year) for receivable amount and other related accounting transaction procedures. The above procedures were re-integrated and built into the levy & collection management information system, which was officially launched in January 2009.
In 2010, in order to simplify procedures and to save labor costs, the taxation bureau’s handling of the execution (creditor’s rights) voucher business changed from hard copy to soft copy, and the notice to taxation bureaus were also transformed from paper to digital government documents, which replaced the manual case-by-case scanning process. In June 2011, the above process was piloted by the Changhua County Taxation Bureau, and in December 2012, the process was promoted in all local tax bureaus.
Since 2010, under the “Integration, Reengineering and Renewal Plan of Taxation Information System”, all tax bills have been barcoded, and the establishment of rapid integrated tax cancellation and tax payment flow, nationwide cross-bureau offset the Refundable Taxes Payable Against the Delinquent Taxes Receivable was implemented to improve all the above processes more efficiently through automation. In addition, the electronic form signing mechanism was introduced, and digital government documents were connected with the taxation administrative system in order to achieve the goal of energy saving and carbon reduction, which all launched in October 2012. In November 2013, the local tax information platform plan launched under the plan of the taxation reengineering, and the offset the Refundable Taxes Payable Against the Delinquent Taxes Receivable for national tax and local tax can be handled across platforms, bureaus, and jurisdictions.
Cooperating with the Directorate General of Budget, Accounting and Statistics, Executive Yuan in 2015 to formulate the “Consistent Regulations on the Accounting System of General Public Service Units of the Central Government (Draft)”, amendments to the “Mainland Taxation Accounting System” were made as the basis for taxation agencies of the central government to handle taxation accounting business. The accounting basis was changed from “revised accrual basis” to “accrual basis”.
In order to reduce the manpower load of financial institutions to collect administrative execution fees at the counter and to write off and distribute tax payments at the taxation bureaus, starting from November 2015, the transfer execution fee is collected in a tax & fee combination and included in the information & financial flow, i.e., the connection of information flow of the relevant taxation system after the financial flow of the Financial Information Service Co.Ltd., and utilizing the three-segment barcode which integrates the administrative execution fee into the tax bills. The above stated combination & flow, saves the time for the public to wait for the tax bill to be printed, and avoids the bank’s rejection of the execution fee or entering the temporary tax and fee collection payment in the form of a tax bill without a barcode, which would cause abnormalities in the follow-up tax reconciliation of the taxation bureaus. This makes the tax & fee collection service of financial institutions more efficient, provides a more convenient, secure, and time-saving process for taxpayers paying taxes, and realizes the ideal of energy saving and carbon reduction.
According to the Interpretation No. 746 issued by the Grand Justices on February 24, 2017, it was unreasonable to levy interest on Belated Surcharge and did not conform to the constitutional principle of proportionality, and is also contrary to the intent of the constitution to protect people’s property rights; therefore, the Belated Surcharge for all tax items should not accrue belated interest. The Ministry of Finance amended relevant tax laws and regulations in accordance with the intent of the Judicial Interpretations made by the Grand Justice, followed by the updates & launching of relevant system made by the Fiscal Information Agency (FIA) of the Ministry of Finance in June 2017.
In order to strengthen the national tax arrears clearance process, the Ministry of Finance continued to collect various property information of tax debtors and provided access to nationwide taxation bureaus and administrative enforcement agencies for use; these property information of tax debtors are: bank deposits, labor insurance, health insurance, tax registrations of business entities (before 2011), compensation for compulsory purchases (2014), golf licenses (2016), and mortgage debts (2017). In addition, aircraft and ship owners’ information from the Civil Aeronautics Administration (CAA), and the Maritime Port Bureau of Ministry of Transportation and Communications (MOTC), and centralized custody & clearing data from Taiwan Depository & Clearing Corporation (TDCC) have been used since 2018. Such property information effectively grasps the tax debtor’s available property for execution, and significantly improves the implementation efficiency of tax arrears cases.
In May 2018, according to the resolution of levy accounting system revision meeting, and in conjunction with the “Consistent Regulations on the Accounting System of General Public Service Units of the Central Government (Draft)” formulated by Directorate General of Budget, Accounting and Statistics, Executive Yuan in 2015, the “Mainland Taxation Accounting System” was amended to serve as the basis for local taxation bureaus to handle levy collection and accounting business. The accounting basics has been changed from “revised accrual basis” to “accrual basis” since 2019.
In response to the implementation of “The Ministry of Finance strengthening the implementation measures for the quality of the defense of the Administrative Remedies cases of the National Taxation Bureau in each region” Paragraph 3 of Article 5, modification of related systems was made by the Financial Information Agency (FIA) of the Ministry of Finance (MOF), and was officially launched in July 2019 in order to facilitate control and return.
In order to effectively integrate national tax and local tax safeguards cases, since 2019, automatic synchronization services have been provided to national taxation and local taxation cross-agencies, when changes occurred in tax safeguard cases of each bureau, the changed transaction would be automatically synchronized to the nationwide database of the sponsoring authority and co-sponsoring authorities across the country, providing correct and complete safeguards process in real time, which helps improve the effectiveness of the implementation of tax arrears cases.
In response to the COVID epidemic, in 2020, a total of 18 national taxation and local taxation items were updated under levy collection tax categories and other related tax misconduct, violation, and fraud categories. These updates were made in order to speed up the review process of the taxation bureaus, and to assist taxpayers defer and pay taxes by installments in a timely manner to relieve the difficulties of the people.
According to the order No. 09404565240 issued by the Ministry of Finance on November 17, 2005, through the transferring to compulsory execution by the taxation bureaus, and the cancel and reassess cases after administrative remedies, the taxation bureaus must apply for Cessation of the Compulsory Execution to the executive agency. In 2020, the transferring to compulsory execution (pending) letter to Cessation of the Compulsory Execution remarks and other relative functions launched in order to effectively enhance the harmony between the taxation bureaus and taxpayers, and to reduce the cost of handling disputes by taxation bureaus.
In order to effectively manage the fraudulent collection of e-invoice bonuses by illegal means, as well as the transfer of unrecovered amounts to compulsory execution operations, since 2021, the functions of chasing of the winning invoices transferred to compulsory execution and its execution certificate management have been used to simplify the collection process of taxation bureaus, and reduce transfer operation management costs.
In order to ensure the tax obligations and take into account the rights and interests of taxpayers, the Ministry of Finance approved in 2022 the “Guidelines for Tax Authority to Handle the Notification of Property Transfer and Provisional Attachment of High-Risk Cases”, and related information system established. The system simplifies the reporting procedures of high-risk cases between tax authorities across the country, integrates taxation procedures such as review, collection, delivery, tax arrears clearing, and tax safeguards, and provides real-time check between real estate transfer declaration data and high-risk cases notification to prevent high-risk cases taxpayers transfer property to avoid compulsory execution.
In accordance with the provisions of Article 12 of the Civil Code, the age of majority is lowered to 18 years old and comes into effect on January 1, 2023. National taxation & local taxation compulsory execution information systems were leveraged and developed in order to protect statutory duty of taxpayers and rights, construct tax fairness, and increase the harmony between tax collection and payment.