Improving efficiency of Thailand’s tax dispute resolution: a case for mediation in administrative review stage

This independent study investigates how mediation could be adopted to improve the efficiency of resolving tax disputes in the administrative review stage under the Revenue Code, Excise Tax Act, and Customs Act. Some parts of the Thai tax dispute settlement process can be improved, including prolonged procedures, high costs, and complicated procedures. Many countries offer various alternative dispute resolutions (ADRs), particularly mediation to resolve tax disputes because it aims to accelerate the process by enhancing communication which improves cost effectiveness, maintains relations between both parties, stimulates flexible procedures, and increases transparency.The Thai tax dispute settlements process comprises the administrative review stage and the judicial stage. At present, mediation is only used at the early judicial stage to settle issues related to fine reduction or tax instalments. Nonetheless, it cannot reduce the workload in the judicial stage, resulting in increased costs for taxpayers and tax authorities alike.The administrative review stage offers the right to appeal to taxpayers which is only way to resolve tax disputes before trial. Moreover, the current Thai appeal procedureis highly time-consuming, especially for the Revenue Department which does enforce a limitedtimeframe. This lengthy procedure increases costs, creates inconsistency, and reduces public confidence in the Thai tax system. The appeal procedure lacks fairness for taxpayers in terms of clarification. Mediation may accelerate the procedure and enhance the fairness and efficiency of tax dispute resolution while minimising costs and posing as an additional option to resolve tax disputes, decreasing the number of tax cases that reach the judicial stage.By employing a comparative study with Australia and France, the present research investigates the application of mediation in both the administrative review stage and the judicial stage to resolve tax disputes. Australia offers various types of mediation to assist both parties in resolving tax disputes as soon as possible, reducing tax cases in Tax courts. ADRs are adopted during the tax audit up until the litigation. France also offers mediation as an option for taxpayers to resolve issues before filing to court. According to this study, it is possible to use mediation to resolve tax disputes at the administrative review stage, but the legal framework must be considered with the Good Tax Principle, and carefully set out to minimize the concerns of using mediation.For this IS, the author, therefore, studies the current issues and relevant theories, and compares Thailand with Australia and France to propose the adoption of internal/external mediation before filing to the tax court. The author also proposes the following key features to implement tax mediation in practice: 1) amending relevant tax legislation for taxpayers to utilise taxation mediation, 2) amending the Ministry of Finance regulations to carefully set out the legal framework to adopt mediation in the administrative review stage, and 3) establishing guidelines for tax authorities to resolve tax disputes efficiently.