Page 2046 - Week 08 - Tuesday, 8 September 1992
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two continuous years. The provisions require the commissioner to provide a taxpayer with immediate relief, although the final test as to whether or not an exemption should apply cannot, in many cases, be ultimately decided until five years have elapsed. The provision requires the commissioner to keep track of a taxpayer for over five years and, where necessary, to issue retrospective assessments for past years. Also, there is considerable room for doubt as to the circumstances under which the exemption was intended to apply; and, as observed earlier, the absence must be for reasons related to the owner's employment, thus precluding families where the family home is in the name of the spouse.
Clearly, this provision is difficult to administer. The Bill introduces a new employment provision which, by and large, fits within the framework of the current provision but adds greater certainty and equity. The provision allows the commissioner to prospectively grant an owner a three-year exemption, provided he is satisfied that the person's absence is by reason of his or her, or his or her spouse's, current employment and that the owner will be returning to the ACT at the end of the temporary transfer. Persons transferred for longer than three years may still be granted a three-year exemption but will be required to pay land tax in respect of any additional years. This is an extension of the current scheme and should be welcomed by many employees. While the concept of two years' continuous residence after a posting has been retained, it is now only a precondition in relation to the granting of any subsequent exemption for a second or subsequent posting. The reason for the absence has been clarified to ensure that only persons absent by reason of their current employment are eligible to apply for tax exemption. This will provide the commissioner with more certain criteria to apply.
The commissioner has advised that, while the provision which allows him to grant an exemption on compassionate grounds adequately covers situations of illness and death, which are specifically mentioned in the Act, he believes that the grounds are limited and that other kinds of deserving cases are outside his discretion. These include family situations and absences caused by an owner searching for work interstate. The Government has therefore decided to expand the commissioner's discretion in this area, and the Bill amends the Act to allow the commissioner to exempt from land tax an owner who has, on compassionate grounds, a compelling reason for not occupying his or her principal place of residence for a period of up to two years. The concession will be limited to one land tax payment for each separate occasion for which tax exemption is sought.
The Government recognised that under the current Act the commissioner has a discretion to grant an exemption for an unlimited period. This is entirely inappropriate and leads to an expectation that, if granted on one occasion, the exemption is an ongoing right, provided the circumstances do not change. The Government is sympathetic to cases where, due to illness, death, unemployment or for some other sudden and compelling reason, a person is forced to be temporarily absent from his or her home, but an open-ended exemption granted at the expense of other ACT taxpayers cannot be justified. It is for this reason that the commissioner's discretion has been limited to one year's land tax for each compelling and separate occasion on which a taxpayer seeks a tax exemption.
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