What the Tax Code should Be?

ALMATY, Feb 17


�I call all concerned people to participate in working out of the Tax Code,� the Minister of State Revenues announced at the second National Conference devoted to the project of the Tax Code, on February 11.

Zeinulla Kakimzhanov said that the Expert Council holds meetings every Friday in Kargalinsky sanatorium. People may send their proposals to the web-site of the Ministry of State Revenues.

The Minister emphasized that now it is necessary to choose a general direction, to determine provisions of the juridical part, as well as structural principles of the court system for cheaper and more efficient settlement of disputes.

Main issues of the conference were law ones, that emerged while the bill was being worked out:

� To supplement administrative tax infringements to the Tax Code and to exclude them from the Criminal Code;

� To create an efficient system to settle disputes between tax bodies and taxpayers (by means of specialized tax courts, Tax Arbitration, etc.);

� To regulate juridical issues regarding interrelations between tax bodies and taxpayers.

Tuleugaliev, the chief of the financial law department, Kazakh State Juridical University, said that �the Tax Code is to contain all tax standards. The rest standard acts somehow regulating tax relations are to be based on the Tax Code, but not to contradict it. Arbitration may be an alternative way of juridical defense.�

Just the opposite, the chairman of the Board of Directors of the JSC Bank Caspyisky, Kolpakov does not support Arbitration and supplementation of administrative-tax standards to the Code. He proposed to create a complex of tax courts.

The head of the USAID project � Financial-Law Reform, said that specialized tax courts are functioning everywhere in the world. Hence, the idea to create Arbitration is quite progressive.

Zeinulla Kakimzhanov added that they plan to complete the Peculiar part of the Tax Code, as well as to create a working group to work out its Juridical part soon.

THE GLOBE asked Dmitry Bratus, the managing partner of the international law firm LEX ANALITIC to comment on the projected system to settle disputed between tax bodies and taxpayers with the help of tax courts and Arbitration:

I personally treat this idea very skeptically, moreover � negatively. Who will consider tax disputes as arbitrators? If the same judges just change chairs, then all defects of the present court system will remain in the system being discussed now. If arbitrators are appointed from independent lawyers, then why do we need the existing courts? The approach is interesting: a judge cannot consider a tax dispute professionally, then let�s invent a new court (arbitration) instance. Isn�t it easier to train judges additionally, to provide them timely with standard materials, to hold regularly thematic seminars, to make them responsible for decisions, i.e. to create normal conditions to improve judges� professionalism and to take really efficient measures.

In the light of the discussed problem, I want to remind you of the attestation of judges, which means a definite selection, appointment of a man competent in any (!) law (including tax) matters, who knows the juridical standards.

At present initiators of the tax reform offer to establish specialized bodies to consider tax disputes. Can you guarantee that tomorrow or day after tomorrow they won�t propose to create arbitration to consider Customs disputes, or a more radical idea � to establish courts that will consider exclusively family conflicts or disputes caused by accidents, etc.?

The Civil Code current in force, according to which any property conflicts are settled, has a lot of defects. I think to improve the existing law situation to be a more constructive way. Creation of obscure, by their juridical essence, structures or invention of principally new commonly-accepted rules of behavior will unavoidably cause the collision: at first a tax arbitration will appear, then dissatisfied people will resent that activity of these instances is not regulated by the law at all, we lack specialist, etc. As usual, we invent a problem and heroically fight with it.

Another important issue is the rate of the duty (tax). At present applicants on property disputes - juridical persons pay 3% of the hazard amount, individuals pay 1%. These rates are comparatively low. It is difficult to forecast what tax rate arbitration will collect for consideration of tax disputes. We also should consider gradual �monopolization� of the trials on tax disputes by a group of people, e.g. by Ministry of State Revenues functionaries. Then we will not be able to talk of a just, objective justice at all.�

The Reader may read interview with participants of the Conference below on the same page.

Law Bulletin

On December 30, 1999 Kazakhstan joined the Hague Convention dated October 5, 1961, which abandoned legalization of foreign official documents.

The Convention is applied to in Kazakhstan�s relations with agreed countries, if the latter did not raise an objection to the Convention within six months after signing of this international document and receipt of the notification by the Netherlands� Ministry of Foreign Affairs.

The list of official documents which are provided by the Convention is complete. They are: documents by a state body (Office of Public Prosecutor, court, etc.) or by a functionary; administrative and notarial acts; official certificates, including registration certificates; visas confirming a definite date (term); attesting of a signature on document that was not attested by the notary. The numbered documents are freed from diplomatic and consular legalization. The only formality is apostille, a special stamp of an authorized state body that gave the document. Thus, the authenticity of signature and seal on the document, as well as status of a person signed the document are confirmed.

As a rule, apostille is made in language of the state that puts it. However, points of the apostille may be written in another language. The obligatory requirement is that the title �Apostille (Convention de la Haye du 5 octobre 1961)� is in French. Signature, seal and stamp of the apostille are not attested specially.

The Convention stipulates the following documents as exceptions: 1) documents by diplomatic or consular agents, administrative documents directly concerning commercial and Customs operations; 2) the apostille is not stamped if document not legalized, according to agreement between concerned states.

Kazakhstan receipts official documents prepared or attested in the form accepted in the CIS countries (see the Minsk Convention (22.01.1993) on law aid and law relations on civil, family and criminal matters), as well as the People�s Republic of China and Mongolia (Agreement between Kazakhstan and Mongolia dated 22.10.93, and Agreement between Kazakhstan and China dated 30.05.95).

You may get the detailed information on any law issues and qualified services in the Almaty office of the law firm LEX ANALITIC. Tel./fax: 631-711, tel.: 637-226.

E-mail: [email protected]

All Over the Globe is published by IPA House.
© 1998 IPA House. All Rights Reserved.