Euro judges could squash tax snoop move
In addition, the measure appears to violate the basic human right to privacy guaranteed by the Council of Europe, an intergovernmental organisation protecting human rights and the rule of law, which Poland joined in 1991.
Successive governments have lost all but one of the cases they defended before the Court of Human Rights .
A clamour rang out after reports wrere published that the tax intelligence unit would have extended powers to access personal correspondence, wiretap phones and examine phone records under a new bill proposed by the Finance Ministry to crack down on tax criminals. The measures would give the special tax agents the same authority as police and other law enforcement agents who already can use such measures for fiscal crimes, but usually must obtain a court order to exercise them.
The current tax law already allows tax agents to use physical force and under certain circumstances to view bank accounts and access records for real estate holdings, securities transactions and vehicle ownership.
Alarms were raised by reports that the special tax squad would have unlimited surveillance powers with no judicial supervision.
The Finance Ministry's press office declined to answer questions via phone, but later issued a statement saying that the tax intelligence unit would work under the supervision of the court in its efforts to track down tax evaders.
A law enabling the tax intelligence authority to collect information on taxpayers and dodgers "by operational and intelligence means" has been in effect since 1998, but only mentions intelligence rights in a very general manner, according to the statement. The new bill "is to detail and precisely define their legal framework."
But the ministry did not specify the extent of the powers that the tax police would have under the new bill. The statement read: "Observation is one of the basic methods of intelligence activities. This issue, along with the questions of other methods of operational activities, has so far been regulated by a secret directive of operational activities. Because this case involves the constitutional field of civil rights and freedom, it is desirable to have some aspects of that directive defined by law, which we are aiming to do."
The new bill is part of Finance Minister Grzegorz Kołodko's efforts to crack down on tax dodgers in order to replenish the government's depleted coffers. He recently offered non-payers a hefty discount on their tax penalty fees in return for paying part of their back taxes.
Under his bill, which was approved by the Sejm in September, individuals would also be required to declare their worldwide income and assets to the Polish tax authorities, exposing them to higher taxes here. President Aleksander Kwaniewski refused to sign the bill and sent it to the Constitutional Tribunal for review.
Yet, legal experts raised warning flags and denounced the new invasive measures as violations of privacy and civil rights, adding that if correct the ministry's bill would ultimately be decided by the country's Constitutional Tribunal, the high court that rules whether legislative proposals or laws are unconstitutional. Depending on the outcome there, it could be sent to the Court of Human Rights in Strasbourg.
Maciej Żukowski, a tax adviser at Allen & Overy's Warsaw office, called the proposals "unconstitutional" and a "violation of human rights."
Totalitarian state
"If the press report is true, it would seem like a suicide move for the ministry because it would go to the Constitutional Tribunal, which would reject it," Żukowski said.
Janusz Fiszer, a partner at White & Case's Warsaw office and an international authority on taxation and financial law, said that the Constitutional Tribunal would consider the ministry's proposals "a violation of privacy."
If the proposition of such measures by the Finance Ministry is true, "it pushes us towards a totalitarian state," he said. "Such a provision goes too far."
Fiszer added that the constitutional court would likely modify the bill and "try to reach the same goal, but with more democratic instruments." Nevertheless, he said that it would be challenged by the business community, human rights groups and the country's ombudsman, who already denounced Kołodko's wealth declaration requirement.
Marek wiškowski, a commercial law attorney at Ernst & Young's Warsaw office, agreed that the bill would be submitted to the Constitutional Tribunal, which would certainly rule that such invasive measures were breaches of the Constitution.
"The tribunal probably won't say that the whole bill is a breach of the Constitution, but that certain parts are to be amended if done without the control of certain authorities, unless it calls for special requirements to be met," he said.
wiškowski also pointed out that such enforcement measures "could constitute the 'second stage' for those who do not pay their taxes" since Kwaniewski did not sign the tax amnesty bill.
A press spokesman at the Council of Europe headquarters in Strasbourg said the body did not comment on such reports to preclude any possibility of future accusations of prejudice should a case related to the matter be brought before the European Court of Human Rights.
She added, however, that Article 8 of the European Convention on Human Rights, which ensures respect for individuals and their families, includes provisions on protecting personal communication, such as correspondence and phone calls. Poland is one of the five countries which has the most cases pending in the Court of Human Rights.
Abuse
Members of Warsaw's legal community also pointed out that the authority to exercise draconian surveillance measures, such as wiretapping, in order to nail tax dodgers could lead to abuse.
"Such instruments might be abused for political reasons under the tax inspection act with the contents of the information used for other purposes and charges," Fiszer said. "This tool would be dangerous, and the user must be controlled."
The Finance Ministry, however, said such charges were groundless, adding that court permission was required for tracking phone calls and wiretapping, and was only granted in cases of serious crimes.
