Page 2237 - Week 08 - Wednesday, 5 June 2013
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One imagines the directors of Telstra might be surprised to find they can be made personally liable for the payroll tax debts of a family trustee company in the ACT, simply because one of the beneficiaries held shares in Telstra.
Of course, these issues have many impacts on businesses. The issue is made worse when taxpayers are mired in having to address tax avoidance allegations. In my dealings with the local community, I have, for example, encountered cases where a business had to wait approximately 3½ years from when they objected to notices of assessment and receiving a decision on these objections. In another instance there was a case where a business had provided the Commissioner for Revenue with information requested in 2006, but received no correspondence until 2010—four years later. The business had no certainty in that period as to what the outcome would be.
But delays are not the only problems faced. There was the example of the case involving new directors in 2009 who took over a company that ceased trading in 2007 and were issued in 2010 that they were jointly and severally liable for debts accrued on the basis of the grouping, only to find out that the objections period had expired. Then, of course, there are the cases of inconsistent application and application of ACAT rulings.
If we look at regrouping, the issues highlighted in relation to the Payroll Tax Act are ACT specific. Within the context of the changes made in 2008, members will remember in 2007 when the bill was passed it was on the assurance from the government that this brought us into line with New South Wales. Currently, the application is certainly not allowing that to happen. So within the context of the changes made in 2008 to bring our payroll tax regime into greater harmonisation with other jurisdictions, the present state of play in the ACT is unnecessary. It is bad for business, it is bad for our economy and it does not give Canberra taxpayers the certainty that they deserve—and, indeed, that they need to run their businesses effectively.
As much as the Treasurer likes to advertise the fact that we have the highest payroll tax threshold in the country, the present state of play shows that the regime behind the Treasurer’s claim is unfair. The fact that businesses are contemplating moving across the border to New South Wales is indicative of the fact that they have weighed their costs and prefer legal certainty to a high tax threshold.
To conclude, as such, I now table the Payroll Tax Amendment Bill 2013 under my name. The proposed amendments clarify the issues I have outlined earlier with regard to greater harmonisation of our payroll tax regime with other jurisdictions, in particular New South Wales.
These include the following: in clause 4, we broaden the exceptions to the “service contract” deeming provisions, bringing the ACT’s payroll tax legislation in line with New South Wales legislation. Clause 5 allows for beneficiaries to disclaim a gift upon being made aware of the gift and all of its consequences in the period prior to becoming aware of the status. Clauses 7, 8, and 9 expressively give plural operation to the commissioner in degrouping companies. Clause 10 clarifies the position that
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