Page 3426 - Week 12 - Tuesday, 11 October 1994
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Mr Kaine also mentioned the extension of the assessment period to six years. I have a number of comments to make on that. The basic intention of this provision in the Bill is that taxpayers need to be audited only every six years, rather than every three years. So, far from placing an additional burden on taxpayers, it actually reduces the potential disruption to their business while an audit is conducted. I think it is a more reasonable regime than the existing regime, especially for businesses. Mr Kaine also mentioned that, in his view, the Bill meant that a refund of overpaid tax may be possible only within three years. I believe that this is a misunderstanding. Under the Bill, as I have presented it to the Assembly, a refund of any overpaid tax may be made during the six years proposed. So, again, it is an extension of that refund capacity for a taxpayer who has been overassessed, rather than a diminution of it or even a maintenance of the status quo. We have actually extended the period in which a refund may be made.
Mr Kaine's reference to the Commonwealth Income Tax Assessment Act allowing four years is not correct. My advice is that subsection 170(1) actually allows an unlimited time within which to amend assessments under that Act. The reference in the Act to the four-year period applies only to very specific circumstances. It is able to be used only when the taxpayer has made a statement to the commissioner which has caused the commissioner to reduce an assessment. So, again, I think there is a difference of view there. The reference to six years relates to the requirement to retain records for six years under section 96 of the principal Act.
Madam Speaker, Mr Kaine also made some comments about subsection (4) of section 12B being unduly onerous. I would like to advise the house that the purpose of this section is to provide assistance to taxpayers who are actually experiencing difficulty in meeting their obligations. The broadness of the provisions, I think, provides greater capacity for the commissioner to assist taxpayers than if there were very rigid guidelines. The fact that there is a capacity for review in the Administrative Appeals Tribunal of an adverse decision by the commissioner provides a further safeguard in the event of the taxpayer's application being rejected. So, the provision is actually designed to assist taxpayers, not to hinder them. It provides a mechanism which is not currently available to them. So, again, I think the intention of that clause of the Bill may have been misunderstood.
Mr Kaine also commented on the time limits for detection and action in the case of fraud or evasion. That is paragraph 5(b), which inserts proposed new subsection 22(2A). I believe that taxpayers who engage in fraud or tax evasion very often go to quite extraordinary lengths to conceal their liabilities. This often comes as a shock to the honest taxpayer - the taxpayer who pays up, like a lamb, as and when the bill is due. I am sorry to say that some taxpayers go to quite some length to evade their responsibilities. I do not believe that we should say to the commissioner that, if he has not discovered that evasion or fraud within six years, the taxpayer can consider that they have got away with it. I do not think that is fair. I do not believe that the rest of the community, who are being ripped off by these dishonest taxpayers, would think that was fair, either. I do not support fraudulent activity that causes the rest of the community to
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