Page 3428 - Week 12 - Tuesday, 11 October 1994
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
The Commonwealth Income Tax Assessment Act, as amended, section 170, permits the Commissioner to amend only within four years from the due date for payment of tax under the assessment. The four year period can be extended where an examination of the taxpayer's affairs has begun but has not yet been completed, and to obtain an extension the Commissioner must obtain either the written consent of the taxpayer or an order from the Federal Court.
So, it is not open to the Federal Commissioner of Taxation simply to arbitrarily extend the time beyond four years. The advice further states:
A Court Order (from the Federal Court) will only be obtainable if the examination was hindered by something that the taxpayer did or something that the taxpayer unreasonably failed to do.
The advice contains a couple of circumstances in which a court order would be obtainable. So, there is no question that the Federal tax Act prescribes a four-year period, and it is very difficult for the tax commissioner to go beyond four years in terms of amending an assessment.
The Chief Minister talked about fraud and evasion. I think that the Chief Minister needs to be reminded that tax assessments, where they are self-assessed, can very often be wrong, due to a lack of understanding of the law. The law in connection with tax is often quite complex, and not everybody who puts in an incorrect assessment is guilty of a criminal offence. My advice again from the accounting societies is that the existence of fraud can never be assumed. I would like the Chief Minister to note that. It must be proven by showing that false representation is made knowingly, or without belief in its truth, or recklessly, or without caring whether it is true or false. I submit that very few people submitting tax returns to which this Act will apply would be guilty of such offences. They would be very much in the minority. Yet there will be many cases where these taxpayers will wish to seek an amended assessment.
My criticism is that we are using a sledge-hammer to crack a walnut. We are assuming that everybody that puts in an incorrect tax return is a crook and, therefore, he or she should be susceptible to having the tax assessment changed and having a penalty levied at any time in the future, according to the Bill that the Chief Minister has put before us. The Commonwealth law does not permit that. The Chief Minister's argument that it can be extended beyond the four years is wrong. I would ask members of the Assembly, in voting on my amendment, to remember that the Chief Minister seems to have misinterpreted the situation at the Federal level or her advisers have wrongly advised her on it. It is almost invariably a four-year period during which the Commonwealth Taxation Commissioner must issue an amended assessment, if he intends to do so. He cannot do so five, six, seven or eight years downstream, except in very limited circumstances. As I pointed out, that is either with the written consent of the taxpayer himself, who presumably would have to concede that an error had been made, or as a result of an order from the Federal Court. These conditions are not easily met.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .