The tax appeals system is too congested and must be simplified in order for citizens to avoid prohibitive extra costs in interest while their cases remain unheard, the Law Society has claimed.
In its pre-Budget submission, the Law Society said there were "two obstacles to justice that require redress" this year.
"Firstly taxpayers are caught up in the congested tax appeals system, and are not being afforded the principles of natural justice and fairness on account of the long delays in the system with accumulating interest.
"A reduced Vat rate for legal services or at least for legal services utilised by individuals should be considered in order to promote access to justice and to remove the inequality of treatment between individuals and economic traders who can recover Vat," it said.
The legal representative body said that as of April, the Tax Appeals Commission had 3,568 active appeals under its remit, with numbers "growing exponentially month on month".
"Cases are caught in the system for significant periods, with some in excess of 10 years. This can result in significant costs for the taxpayer who is exposed to high rates of interest while their case is stuck in the system. Interest accumulates from the date the disputed tax was due until it is paid," the submission said.
The body said the system had to identify and categorise the backlog "to get it working again".
"Due to the delays which are out of the control of the taxpayer which give rise to huge financial costs, consideration should now be given to statutory interest being stopped on all cases lodged and currently caught up in the system until such time as the system is moving again.
"The use of arbitration, mediation, small claims court and other early assessment and review mechanisms, as used successfully in other jurisdictions, must be considered," it said.
Meanwhile, small business lobby group Isme said the tax system "needs fundamental overhaul" in its pre-Budget submission.
"Tax discrimination against the self-employed must end, and workers who currently enter the top tax rate at just 90% of the average industrial wage, must see a raising of the marginal threshold, even if it takes some years to achieve this.
"We are too reliant on potentially itinerant foreign multinationals for corporation tax income. So our tax system must start to meaningfully foster indigenous business," Isme said.
It claimed the "extortionate" 23% Vat rate should be cut below 21%.