The National Assembly (DNA) is currently considering proposals to modernize the tax system. The General Tax Act (AWB) must coordinate the formal rules for different taxes more closely: declarations, assessments, checks, information obligations, objections, appeals and sanctions.
Text Ivan Cairo
Image dWT archive
The level of taxes themselves remains regulated in the individual tax laws. In addition to the AWB, the Tax Collection Act and the Tax Collection Costs Act are on the agenda. These should give the Tax Authorities more options to collect tax debts.
“When we introduce a modern law into an organization that does not have the capacity to implement it, we create a big problem for ourselves”
NPS faction leader Jerrel Pawiroredjo
The government estimates SRD 46.8 billion in tax revenues for 2027, more than SRD 4.2 billion more than in the adjusted budget for 2026. Better control and collection can help to collect what the state is entitled to. But the way in which this is done directly affects citizens and companies. And that is precisely where there is increasing criticism – not only from politics, but also from tax law.
Legality principle under pressure
Tax lawyer Stanley Esajas warns that parts of the draft AWB pose legal risks. He also shared his comments with party leaders in DNA. When asked, Esajas states that not the entire draft law is unconstitutional, but asks parliament to adjust and clarify various provisions. His main concern: the constitutional principle of legality. This means that taxes and important parts thereof must be regulated by law.
One of his fundamental objections concerns the proposed scheme for preventing double taxation. The expert believes that this belongs in the individual tax laws, not in the general law.
He also believes that the minister should not be given the authority to unilaterally adopt regulations that could change the tax burden. That could be contrary to Article 155 of the Constitution. “The legislature must make such choices itself,” he warns, to avoid arbitrariness.
Esajas also sees a problem with the fine amounts. Article 60 would make it possible to change these amounts by state decision. According to him, this could violate the principle of legality. As an alternative, he proposes a fiscal unit of account, the value of which can be adjusted annually by formal law. This way, the parliament remains in control.
Scope, TIN number and publicity
He further believes that the AWB should apply to all taxes, with a clear list of any exceptions. According to him, the current summary in Article 1 mentions, among other things, the now expired sales tax law. Introducing new sanctions on the basis of an expired law is not possible, says the expert.
He also points out the lack of clarity surrounding the TIN number. The FIN Act has not yet formally entered into force. He proposes to include the arrangement regarding the tax identification number in the AWB and to link the taxpayer number to data that withholding agents, such as employers, provide to the Tax Authorities.
Esajas also wants administrative rules and interpretations of the Tax Authorities to be made public, including on the website of the ministry or the implementation services. This would improve legal certainty and compliance and could reduce the pressure on the tax authorities. He also advocates a ban on compensation that taxpayers should pay to civil servants or the service for work covered by the law.
Deadlines and feasibility
According to Esajas, the proposed objection procedure requires clarification. He believes it is reasonable that the objection period only starts when a decision has actually been announced, because assessments are sometimes only delivered by post weeks after the date. It should also be defined more clearly what constitutes disclosure.
He calls decision periods that can run up to a year unreasonably long. He proposes making the extension option temporary and having the director of the Tax Authorities report on measures to shorten the terms.
Esajas also draws attention to future maintenance of the law. He recommends decimal item numbering to make it easier to insert provisions later, leaving room for formal rules transfer pricing. Tax laws from which provisions are deleted must also clearly refer to the AWB.
He mentions the lack of a tax plan as the underlying problem. Without such a plan, he believes, it is not sufficiently clear which reforms have priority and how the various draft laws fit together.
Political concerns about collection and legal protection
His warnings echo the concerns expressed in the DNA. One of the sensitive points is that an objection or appeal against a tax assessment does not automatically suspend the payment obligation. The tax authorities can therefore continue to collect while the taxpayer contests the assessment with reasons.
A20 faction leader Steven Reyme pointed out the possible consequences for companies. Seizures on working capital can lead to salaries and suppliers no longer being paid. “We all believe that this tax law must be introduced. But on the other hand, we must also look at how we protect the rights of our citizens,” Reyme said.
NPS faction leader Jerrel Pawiroredjo also warned of heavy collection measures while a serious dispute is still ongoing. “Article 26 should therefore not be a license to use the strongest instrument in a serious dispute.” He argued for clear rules on deferment of payment or suspension of collection and for quick access to justice when such a request is rejected.
Corporal coercion – depriving someone of their freedom to enforce payment – also raised questions. Parliamentarians asked what safeguards prevent someone who cannot pay from being treated the same as someone who consciously refuses. The government has been asked to ensure that coercion is only used as a last resort, in the event of demonstrable unwillingness.
In addition, questions were raised about measures regarding passports for people who move abroad with assets. Concerns that physical coercion is at odds with human rights have been expressed in parliament; a legal opinion on this has not yet been given.
The Tax Collection Costs Act asked why minimum and maximum amounts apply to a reminder, while no comparable ceiling is included for a writ of execution. Parliamentarians asked the government to consider a maximum or a sliding scale to prevent collection costs from being disproportionately heavy for smaller tax debts.
Is the Tax Authorities ready?
A second big question is whether the Tax Authorities can implement the new rules. The proposals assume reliable digital systems, sufficiently trained staff and a well-functioning tax judiciary. NDP faction leader Rabin Parmessar therefore believes that the actual readiness of the Tax Authorities should determine the entry into force. He advocated an implementation plan and a readiness test, and suggested phased implementation. He also wants DNA to continue to monitor implementation through annual reports.
Pawiroredjo warned: “When we introduce a modern law into an organization that does not have the capacity to implement it, we create a big problem for ourselves.” Digital systems must also be reliable. A missed notification or malfunction may not lead to a taxpayer losing an objection period through no fault of his own. People who are less digitally skilled should also be able to receive support.
Control should not only be aimed at citizens and smaller companies. BEP faction leader Ronny Asabina wants the state to better investigate tax payments and tax agreements with large mining companies. “We have no idea how much we’re losing,” he said. However, his point underlines the importance of sufficient expertise to independently assess the financial information of large companies.
VHP faction leader Asiskumar Gajadien pointed out another trade-off: tax policy also influences how much room companies have to invest and hire staff. Tax benefits are not necessarily desirable or undesirable. The government must be able to assess whether they are necessary and what results they provide.
Limited, testable and executable
The proposals aim at a more modern tax system. Whether that system becomes fairer and more effective partly depends on the guarantees and implementation. The distinction between inability to pay and conscious refusal is essential. A strong tax authorities must be able to collect taxes, but also deal carefully with seizures, coercion and costs.
“We all believe that this tax law should be passed. But on the other hand, we also have to look at how we protect the rights of our citizens”
A20 faction leader Steven Reyme
Esajas’ comments show that the legal quality of the AWB is just as important as its implementation power. Without clear deadlines, public policy rules and a tax plan, a strong tax authorities are in danger of becoming an unpredictable tax authorities.
The quality of the reform will become apparent from the question of whether those powers are limited in practice, verifiable and feasible. On the other hand, the government will not be allowed to simply ignore Parliament’s concerns.
