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2012

Excessive Travel Restrictions on Offender of Tax Evasion

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The proprietor of a construction company was restricted from exiting the country on the grounds that his company had deferred payment of enterprise income tax. After receiving the proprietor’s complaint, the Control Yuan launched an investigation and found misuse of such restriction violates the right to freedom (Case no. 1010800037).

The complainant was issued two restrictions that prevented him from exiting the country. The first restriction was given in June 2004 after the complainant was found guilty of deferring business income tax for the 2000 fiscal year. In 2005, the complainant was again found guilty of tax deferral for the 1996 fiscal year and was given a second exit restriction. In 2007, the complainant was found guilty of another tax deferral for the 2003 fiscal year. However, the amount of outstanding tax for 2003 did not meet the minimum requirement to warrant exit restriction. On August 13 2008, the government implemented the new Tax Collection Act that stipulates that the period of restriction from exiting the country shall not be over five years from the date of enforcement. Instead of lifting the two restrictions issued in 2004 and 2005 respectively, the Ministry of Finance combined the amount of outstanding tax for the aforementioned three cases (a total of 3,878,852 NT dollars) and issued yet another restriction in July 2009. The Ministry of Finance only lifted the complainant’s exit restriction on January 30 2012, when the complainant had paid all the outstanding tax for the 2003 fiscal year, without considering the complainant’s indebtedness as the cause of his tax deferral (Outstanding taxes for fiscal years 1996 and 2000 had passed the statutory collection).

The CY’s investigation found the Ministry of Finance fail to abide by due process and the rule of proportionality to minimize damage, therefore causing great distress for the taxpayer. At the CY’s request, the Ministry of Finance had lifted the complainant’s exit restriction on February 1 2012. To prevent the problem from recurring, the Ministry of Finance ordered its local tax bureau to conduct monthly checking to identify cases that warrant lifting of restrictions, double check outstanding tax for exit restriction cases, conduct annual inspections to local tax authorities, list exit restriction as criteria for performance evaluation, conduct staff training, and publish work manuals to facilitate on-the-job learning.