Amicable Methods for Settling Tax Base Disputes in Income Tax

Abstract

This study examines "Amicable Methods for Settling Tax Base Disputes in Income Tax" as flexible alternative mechanisms aimed at resolving disputes away from the complexities and delays of litigation. The research problem lies in the widening gap between the tax administration and taxpayers due to arbitrary assessment errors or lack of technical expertise, which leads to an accumulation of disputes and disrupts the flow of public revenue. The research aims to analyze the concept of the tax base and its assessment methods, exploring the effectiveness of amicable means (reconciliation, arbitration, and mediation) in resolving these disputes, with a focus on the position of the Libyan legislator in Income Tax Law No. 7 of 2010.

The study adopted an analytical-deductive approach by examining legal texts and deriving facts related to settlement mechanisms. The findings revealed that the Libyan legislator recognized "Tax Reconciliation" as the sole amicable method in Article (17); however, it was not precisely regulated regarding its conditions and legal effects, leading to procedural ambiguity. Furthermore, the study showed that Libyan legislation completely overlooked arbitration and mediation, despite their technical specialization and efficiency in dispute resolution.

The study recommends a comprehensive review of the Libyan Income Tax Law to fill the legislative vacuum regarding arbitration and mediation and to detail the provisions of tax reconciliation to eliminate ambiguity during implementation. It also emphasizes the importance of enhancing tax awareness and training specialized technical cadres to act as mediators or arbitrators, ensuring tax justice, strengthening trust between the taxpayer and the administration, and guaranteeing the swift collection of public treasury rights.