Page 6269 - Week 19 - Tuesday, 17 December 1991
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Let me remind members that people then go from the Revenue Office and search those firms' records a year back and two years back, and they have to have made a decision themselves on whether they are liable. The advice to me goes on:
However, the provisions are complex and give rise to many difficulties in interpretation, thereby potentially exposing ACT businesses to the imposition of penalties, for non-compliance.
That is another factor that moved me to do this. I know that a number of firms are being audited now, or have been in the last few weeks. They do not know, because of the complexities of this, because this commissioner has issued only two rulings on this topic, unlike New South Wales and Victoria. The law should be certain. One of the principles that Mr Connolly, as a lawyer, should endorse is certainty in the application of the law. This area is universally regarded as uncertain by all the eminent people that I know in the accounting and legal professions. It is uncertain.
The commissioner of New South Wales payroll tax has responded to these concerns by preparing a number of revenue rulings to assist in the interpretation of comparable legislation that exists in New South Wales. I have done some research on that, too. In the ACT we have only two rulings and they are of limited assistance. I will give you an example provided to me and to us by this firm. For example:
The owners of a building in the ACT engage an individual cleaning contractor who earns 80% of his/her cleaning revenue from the cleaning of that building. The remaining 20% of revenue is derived from another two sources. The cleaning contractor has an advertisement in the yellow pages. Can the services be considered to be those rendered by a person who ordinarily renders services of that kind to the public generally?
I would think that the law should be capable of interpreting that and helping that cleaning contractor determine his or her liability to payroll tax. I am advised, on this best available advice, and a principal of this firm has been an eminent adviser to successive governments, that that situation is uncertain. So, I am faced with that situation.
I am also aware that subcontractors are affected by this even though they are not mainstream builders, because there is a flow-on effect of the liability for this tax, and that does restrict employment, on all of the anecdotal evidence put to me by subcontractors. I certainly know all about the whingeings that people go on with about paying tax. We all see that, as parliamentarians, from our constituents.
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