Improvement of the administration of tax justice

Tax dispute

Tax courts owe their existence to the dispute that generates when the tax administration’s action differs from the taxpayer’s position.

The courts of appeals in taxation contribute to reduce, not only the effects of litigation, but also its causes, inasmuch as they generate specialized jurisprudence that fills gaps, interpretative doubts or inconsistencies that arise from the tax legislation.

Some good practices in the solution of tax litigations

The IDB, together with CIAT and the German Cooperation Agency have promoted the updating (2015) of the Model Tax Code based on the Ibero-American experience, where the proposal for the implementation of administrative courts persists:

  • Possibility of creating these courts.

  • Alternative between administrative courts and unipersonal entities or collegiate courts.

  • Independent organizations as the hierarchical superior in the solution of these controversies.

  • It has been determined that there is no appeal against the resolution of the administrative court in the administrative action, except for certain issues.

On the other hand, with respect to the Tax Administration Diagnostic Assessment Tool (TADAT[1], for its English acronym, of the International Monetary Fund), it is worthwhile to bring up the Area of Results 7: “Solution of tax disputes”. According to this tool, it is expected that:

  • The procedure for solving these controversies should safeguard the taxpayer’s right to dispute a tax assessment and obtain a fair hearing.

  • It be fair and independent, accessible to the taxpayers and effective in the solution of disputes in a timely manner.

  • It will safeguard the taxpayer’s right to object an assessment resulting from an audit and that he may have an impartial hearing.

TADAT considers good practices adopted for achieving the desired result where these tax courts are taken into account.

Likewise, a series of good practices resulted from the review of the Tax and Customs Courts of Chile[2], namely:

  • Organize jurisprudence by establishing intelligent search criteria in order to distribute and render massive those rulings originating from the Court, as well as those issued by the tribunal.

  • Have available clearly defined and formalized working schemes.

  • Identify and differentiate the causes according to their complexity.

  • Promote periodic coordination meetings.

  • Review the jurisdiction originating from the Court or else from the rulings issued by the same tribunal.

  • Plan the workload.

  • Maintain internal and management controls in addition to the established ones.

  • Request the review of laws, transfer of knowledge and review of jurisdiction.

Tribunals of Latin America

The following systems are proposed:

  • Administrative tribunal system

It is entrusted to entities of the central administration of a special, differentiated and independent nature. Some criticize this model doubting whether they will act with independence from the administration itself, which is part of the dispute.

This category includes Argentina (Fiscal Court of the Nation), Bolivia (Tax Appeals Authority), Brazil (Fiscal Resources Administrative Council), Costa Rica (Administrative Tax Tribunal), El Salvador (Internal Taxes and Customs Duties Appeal Tribunal), Mexico (Federal Tribunal of Fiscal and Administrative Justice), Panama (Tax Administrative Tribunal) and Peru (Fiscal Tribunal). In general, they are under the Ministry of the Treasury, Finance or Economy. In the case of Guatemala (the Tax and Customs Administrative Tribunal) is within the Superintendency of Tax Administration.

  • Tribunal System attached to the Judicial Branch

Judging of tax appeals exclusively or predominantly attributed to the Judicial Branch.

This category could also include the independent special tribunals system, where there is a clear distinction between administrative and jurisdictional functions in general, since although they are entities that may be within the Judicial Branch, they are created for the administration of tax justice.

For example, in Ecuador (District Courts of Tax Litigation) and in Paraguay (Government Accounting Office). The case of Chile (Tax and Customs Courts) is special, inasmuch as it is under the surveillance of the Supreme Court.

  • Administrative Litigation Courts System

The courts are totally independent from the Executive Branch and the Judicial Branch. They are legally qualified to try not only tax issues but also administrative issues in general.

Worth mentioning is the case of Colombia (Council of State) and Uruguay (Administrative Litigation Court).

At the level of the Latin American region, it is worthwhile to point out the functioning of the “Ibero-American Association of Tax or Administrative Justice Courts”[3].

With respect to the studies available, CIAT recently published a complete comparative work on the tax courts[4].

Computerization of judicial tax proceeding

In this regard, worth pointing out is the excellent work by Dr. Carlos M. Folco[5], who proposes an intricate path that leads to a new one, known as “e-justice”, such as the use of the ICTs for improving the citizens’ access to justice and for the effectiveness of the judicial action.

Some countries in Latin America have undertaken in-depth reforms:

  • Costa Rica: has been the pioneer in promoting “Justice without papers”.

  • Mexico: the Federal Tribunal of Fiscal and Administrative Justice has implemented the “On-line proceeding”, to promote, try and solve “on line” the administrative trial.

  • Colombia: its Code of Administrative Procedure and Administrative Litigation calls for adopting such technological elements as the electronic file, digital signatures, the mailbox for judicial notices, etc.

  • Peru: the Fiscal Tribunal is aimed at the digitalization of its procedures, by regulating the “Procedure for the electronic notification of administrative acts of the Fiscal Tribunal”.

  • Brazil: the National Videoconference System, developed by the National Justice Council in order to facilitate, speed up and render more efficient the jurisdictional function.

  • Argentina: the Fiscal Court of the Nation launched in May 2019, the obligatory use of the Jurisdictional Electronic File, which involves a totally computerized procedure[6].

Dr. Folco proposes an interesting debate: is it possible to propose the use of artificial intelligence to do justice? In this respect, the author makes it clear that “issuing a sentence” is materialized with human discernment, without detriment to the way in which artificial intelligence could assist the judge or court in its sensitive function.

Some preliminary conclusions

One must draw attention to the extended presence of tax tribunals in Latin America, mainly organized as true justice tribunals, although within the sphere of the central Administration. Nevertheless, there are particular cases of jurisdictional entities that are independent from the rest of the authorities.

The complexity and multiple facets of the litigation in the tax sphere call for a multidisciplinary approach. Thus, it is important that the human resources include not only attorneys but also public accountants –and even other professions- and that in addition, accounting professionals may perform as members, judges or magistrates. Human resources are key elements and therefore, attracting the best resources should involve appropriate and attractive remuneration.

Absolute independence of these jurisdictional organizations, mainly those performing within the Central Administration, is a necessary condition for guaranteeing an effective administration of justice in the tax sphere. This calls for guaranteeing a full, financial, organic and functional autarchy of these courts and in particular, being especially careful in the appointment of judges, members and magistrates.

The compilation work performed by CIAT points out among other issues, the need to render effective a greater financial and functional autarchy; strengthening the provision of resources in accordance with the important workload; mainly the human ones, with remunerations in keeping with the required profile; establishment of clear and transparent processing rules; greater transparency as regards the status of the procedures and also with respect to the management data; greater controls, by establishing task follow-up and evaluation guidelines; greater use of ICTs in management, although it should be done in a sensible, reasonable and constant manner.

[1] For additional data access:

[2] “Report proposal and alternatives of goals systems for Tax and Customs Tribunals. Progress and identification of the Tribunal business model”, Administrative Unit of the Tax and Customs Tribunals (2016)

[3] Web site of this Association:

[4] The work may be consulted at:

[5] “E-tax justice: Current status and future perspective in Ibero-America.” (2018, CIAT).

[6] Additional data may be consulted at:

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Disclaimer. Readers are informed that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group the author might be associated with, nor to the Executive Secretariat of CIAT. The author is also responsible for the precision and accuracy of data and sources.

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