The federal ombudsman has opened an investigation into the government’s use of the simplified tax declaration (PDS/VVA) to determine if there is enough transparency and information for taxpayers.
The simplified tax declaration takes as its starting point the fact that the majority of people have one job, one salary and no exceptional expenses. To cut down on paperwork, people who fit that description receive in their mailbox a proposal for a simplified tax declaration.
The simplified declaration also goes out to people on a pension, or those who live from social allowances.
In the paper, the tax office has already filled in the information it has – such as income and the size of the quarterly pre-payments – and has calculated the amount of tax remaining to be paid.
The taxpayer is then free to accept the reckoning, or to refuse and submit a full tax return in the normal way.
Since its introduction, the PDS has grown in extent, with 3.2 million people receiving the document in 2019. Over the space of five years, the numbers of proposals sent out increased by 50%.
But the ombudsman has received numerous complaints from members of the public, many of which concern difficulties in understanding the form. Problems include missing information and the use of codes which are not familiar to most people. That lack of transparency, the ombudsman says, could lead to people missing out on possible tax savings.
“The complaints from people raise a lot of questions about information and transparency,” said federal ombudsman Guido Herman.
“What to people actually need to check? Is the information provided complete? Which points contain possible errors? How are dependent children dealt with?”
Citizens, he said, have faith in the government, and the PDS should make the declaration easier for them.
“But they have very few references points to allow them to compare if the information filled in automatically is accurate. And people remain personally responsible for their own tax declaration. They ought to know that, if they fail to react to the tax calculation proposed, then that is taken to be their acceptance of the proposal.”
The investigation will now look into exactly how the federal finance ministry informs the public, and especially whether they are sufficiently open and transparent. A report is expected to be sent to the federal parliament in the summer.