I am a self-employed individual. Recently, I received a strongly might worded letter from the tax department warning me that failure to pay a certain amount of income tax might land me in court. At first, I decided to ignore the letter, as I was not in arrears. However, after some thought, I decided to pay the tax department a visit.

At the department, I was told that the letter I got was just a reminder and that I could not be dragged to court. However, the visit revealed some very serious concerns that I have with our tax system.

I was told that the letter that was sent to me was in the same format as the one that is sent to people who do owe. May I suggest that, in the interest of good customer relations, the tax department consider sending out tax reminders to non-owing taxpayers without the threatening language? However, I have more serious concerns.

On the 'reminder' letter was an amount that is based on the information that I filed. Now, when self-employed persons like me file these documents, we do so based on our best estimate for the coming year. What we actually earn can be another matter entirely.

The type of work that I do, which is in the field of technology, is very unusual. Indeed, I remember when I first went to the tax department to file. I had difficulty in getting the tax department to understand exactly what my work is, as mine seems to be the first of its kind for them. Anyway, I remember telling them, every time I file, that my income source fluctuates, and that nothing is certain.

Shock

At the tax department, I was told that I should pay an amount every quarter, based on the estimates that I submitted. When I told the officer that for people like me that is not possible, based on the infrequency of income, I got a shock.

I told them that for me, there would be quarters when I don't earn anything, so I cannot pay income tax from nothing. For me, payment is on a pay-as-I-earn basis. Imagine to my surprise when it was implied to me that I must still pay - even if I have borrow! Now, I will state publicly what I made very clear at that office: if I don't earn it, I will not pay it! However, I would like to make a few suggestions:

(1) Self-employed persons should not be assessed on the assumption that they get a predictable income. We should still be required to file estimated returns at the start of the year, but assessments should be based on the actual returns that are filed at the end of the year.

(2) The quarterly amounts that are due must be recalculated based on the current tax-free income-tax threshold that is applicable. This year, for example, the quarterly amounts that are due for self-employed persons like me are based on last year's threshold, which is less. This means that the quarterly income taxes that are due (all other things being equal) are inflated.

(3) When self-employed persons overpay income and other taxes, the computerised system at the tax department must be configured to automatically generate letters to these taxpayers advising them of such and, more important, how to get back their money, with interest. If they can generate letters when we owe, they can do so when they owe.

Overpay taxes

These points are very important. It was only when I went to the tax office that I realised that I was about to overpay my income taxes. No advice is sent telling me that my assessed obligations had been reduced. I think that I will stop paying as I earn and instead pay at the end of the year. I need my money more than the Government.

I was told that when too much income tax is paid, the excess is credited to the taxpayer's obligations for the next year. However, when I pointed out that the possibility existed that the taxpayer may not have any obligations for the next year, I was made to understand that in such cases the State holds the credit indefinitely.

This is unacceptable and unfair. As I said before, the taxpayer is not advised when he is owed. Many of these people eventually come out of private enterprise, totally unaware of the fact that the State owes them money. Some of them may even leave the country.

These suggestions would make for a more accurate and fair system of taxation. The technology exists to make this happen.

I am, etc.,

MICHAEL A. DINGWALL

michael_a_dingwall@hotmail.com