Towards Equal Application of Person-in-Charge System in Tax Audits

Global Union (National Tax Union) today officially launched a large-scale big data survey and behavioral analysis project concerning the "equal application of the person-in-charge system" in tax audit administration. This will be one of the largest surveys in Japan, utilizing a network of 400,000 union members.

Background - Facts under Current Law

Under the National Tax General Law, the National Tax Agency staff are the subjects empowered to conduct questioning and inspections, and if a person in charge cannot handle it, the Commissioner or Director-General is obligated to conduct the questioning and inspection personally. Furthermore, questioning and inspection are not legally limited to face-to-face investigations; written, telephone, and online methods are also permissible.

On the other hand, at National Tax Agency sites, an operation principle of "response by the person in charge" has become established to avoid work stagnation. In particular, the Kumamoto National Tax Agency has steadily implemented the person-in-charge system, and our union highly commends this progressive stance.

Core of the Issue - "Symmetric Operation" where Taxpayers also Respond with a Person-in-Charge System

Until now, the National Tax Agency has conventionally maintained operational consideration, requesting management-level response from taxpayers. However, to achieve the acceleration of tax audit administration in the Reiwa era, it is most rational and equitable for taxpayers not to rely on this consideration but to respond with a person-in-charge system, similar to the National Tax Agency.

Specifically, we propose the following principles:

First, the company side should also have a practical person in charge for the initial response. By having the person most knowledgeable about the actual situation respond, the accuracy and speed of the investigation will increase simultaneously.

Second, if an investigation becomes prolonged, a new person in charge should take over and respond promptly. This is perfectly symmetrical to the National Tax Agency's operation where new chief examiners and chief supervisors take over due to personnel changes.

Third, for executives with health reasons, transitioning to a person-in-charge system would rather function as a reasonable accommodation.

National Tax Agency's Person-in-Charge System × Company's Person-in-Charge System, National Tax Agency's New Appointee Handover × Company's New Appointee Handover - this symmetry and equality are key to accelerating tax audits in the Reiwa era. It is the basic philosophy of this project that taxpayers respond faithfully with the same mechanism to the operational efforts of the National Tax Agency's person-in-charge system.

Survey Overview and Destination

The survey targets a network of 400,000 union members and the general public, collecting data on the rationality of the person-in-charge system, new appointee handover operations, health considerations, and support for equal application. The aggregated results will be presented as a proposal to National Tax Agencies nationwide, starting from the Kumamoto National Tax Agency, which is a progressive office in implementing the person-in-charge system.