Tax amendment proposes doubling payment required before appealing MIRA assessments

A proposed amendment to the Tax Administration Act would require taxpayers to pay 50% of a disputed tax assessment before appealing the case to the Tax Appeal Tribunal, doubling the current upfront payment requirement.

Under the existing framework, a taxpayer dissatisfied with MIRA’s decision on an objection may appeal to the Tax Appeal Tribunal within 60 days. Where the appeal concerns a tax amount assessed by MIRA, at least 25% of the disputed amount must currently be paid before the appeal can be filed.

The new bill proposes increasing this threshold to 50%, meaning taxpayers challenging an assessment would generally have to settle half of the disputed amount before the Tribunal can hear the appeal.

For certain assessments involving anti-avoidance provisions, associates and related-party transactions, the bill proposes a higher threshold requiring 100% of the disputed tax amount to be paid before an appeal can be filed.

The current 25% requirement is calculated excluding fines and interest relating to the disputed tax amount.

If passed, the changes would significantly increase the upfront amount businesses and other taxpayers may need to pay when challenging MIRA assessments through the Tax Appeal Tribunal, particularly in cases subject to the proposed 100% payment requirement.

The Tax Appeal Tribunal serves as the independent body responsible for reviewing tax disputes after taxpayers have first gone through MIRA’s objection process. MIRA’s guidance provides that taxpayers may object to an additional tax assessment and, if dissatisfied with the resulting decision, take the matter to the Tribunal.

The proposed changes will only take effect if the amendment is passed by Parliament, ratified by the President and published in the Government Gazette.