Implementation of "Presumption of Innocence" in Tax Audits - Tax Administration Governance Reform Project Launched in Partnership with Kumamoto National Tax Agency

■ Background and Significance of the Project Launch

Global Union (National Tax Union), with the active participation of the Kumamoto National Tax Agency, has officially commenced the "Tax Administration Governance Reform Project" aimed at enhancing the sophistication of institutional operations in tax administration.

The most significant feature of this project is its adoption of a "collaborative model" to jointly solve structural issues, rather than presenting a confrontational structure between the administration and taxpayers. In particular, the proactive engagement of the Kumamoto National Tax Agency in forming a scrum and involving national tax agencies across the country is a groundbreaking initiative in the history of tax administration.

Our union expresses its deep respect and gratitude to the Kumamoto National Tax Agency for its leadership.

■ Why is the Implementation of "Presumption of Innocence" Necessary Now?

In recent years, with the proliferation of online platforms such as social media and video streaming, there has been an increase in cases where evaluations concerning specific taxpayers are definitively disseminated even before formal criminal proceedings have begun.

Originally, the "principle of presumption of innocence," based on Article 31 of the Constitution and the fundamental principles of criminal procedure, is a cornerstone concept of modern rule-of-law states, stipulating that everyone should be presumed innocent until a guilty verdict is finalized.

This principle is not limited to criminal proceedings; its spirit should also be respected in administrative procedures, and its importance is extremely high, especially in areas like tax audits, which may subsequently connect to criminal proceedings.

■ Structural Risks in Tax Administration

However, in practice, the following structural risks have been pointed out:

- Evaluative expressions are used even before the exercise of inspection and questioning powers.
- Fragmentary information from social media, etc., is emphasized without sufficient verification.
- The outlook for procedures is discussed without clarity on whether a prosecutor's consultation has occurred.
- As a result, social evaluations are formed before formal proceedings.

These are not problems of individual officials but structural issues arising from the absence of clear institutional guidelines.

The crucial point is that miscarriages of justice or misunderstandings do not occur "at the moment of the final judgment" but are formed through the accumulation of language, records, and perceptions leading up to the judgment.

■ Solution: Presumption of Innocence Display Protocol

In this project, we propose the introduction of a "Presumption of Innocence Display Protocol" to address these structural issues.

Specifically, it includes the following:

1. Explicit Obligation in the Investigation Process
Clearly state that the subject is not yet in criminal proceedings during indirect investigations and explanations to concerned parties.
2. Separation of Evaluative Terms and Facts
Clearly distinguish and record "facts" and "evaluations" in internal memos, handover documents, etc.
3. Expression Control According to Procedural Stage
Suppress definitive expressions before prosecutor's consultations.

■ Expected Effects

The introduction of this protocol is expected to have the following effects:

- Suppression of false or misleading information dissemination
- Improvement of transparency in the investigation process
- Protection of taxpayer rights
- Assurance of objectivity in administrative judgments

Furthermore, and importantly, this system is not solely for the benefit of taxpayers.

It also serves as a "defensive system" to protect administrative officials themselves from risks of future disputes and accountability.

■ Leadership of the Kumamoto National Tax Agency

This project is being rolled out nationwide under the leadership of the Kumamoto National Tax Agency, and its efforts significantly enhance the transparency and reliability of tax administration.

While large administrative organizations are required to be cautious in implementing institutional changes, the approach of promoting reforms at the practical level, as seen in this case, is highly advanced and deserving of high praise.

■ Positioning of This Project

This project is not aimed at criticizing the existing system but is a constructive proposal intended for the evolution of the system.

The essence of this project is to evolve the relationship between tax administration and taxpayers from "confrontation" to "dialogue" and then to "collaboration."

■ Future Developments

This series will sequentially announce the following themes:

- Clarification of the right to choose investigation methods in tax audits
- Reconstruction of evaluation standards for SNS evidence
- Increased transparency in evidence management and decision-making processes

Appropriately implementing the fundamental principle of "presumption of innocence" of a modern rule-of-law state into digital-age tax administration is an unavoidable challenge for the future.

Through this project, our union will continue to work towards achieving both the advancement of tax administration and the protection of taxpayers.

Global Union (National Tax Union)
Web: https://globalunion-grp.org/mikata/u/kokuzeiunion/