Page 4603 - Week 15 - Tuesday, 6 December 1994
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
The Bill that is before us provides for the commissioner to make an interest payment in certain circumstances. It provides for an application to be made to the Administrative Appeals Tribunal where the ratepayer or the taxpayer is not satisfied with the decision made by the commissioner. Since it is already provided that the Government shall pay interest, what could be the possible exception to the interest being paid at the same rate as that which the Government itself charges to delinquent taxpayers? I fail to see any distinction. The only difficulty is that there could be some slight effect on revenues, in that the commissioner does not get all of the revenues that he estimated at the beginning of the year that he might get. I would consider that, however, to be of very marginal effect. There will not be very many cases where it applies. So, I would urge the Chief Minister to look at this from the viewpoint of equity and social justice. Where a person's money has been taken by the tax commissioner and held perhaps for months while an appeal to the Administrative Appeals Tribunal is made, where a decision is made, the commissioner processes it and eventually decides to repay the money, I think that the same rate of interest as the Government itself charges is reasonable. That is all that this amendment does.
MS FOLLETT (Chief Minister and Treasurer) (8.51): Madam Speaker, the Government will be opposing Mr Kaine's amendment. The amendment tries to introduce a requirement that interest on repayments be paid at the penalty rate. That is currently 17 per cent. This compares with an interest rate on refunds of any other overpaid tax which is currently 5.25 per cent. So, there is a very substantial differential there. I would like to make a couple of comments about why that differential ought to be maintained. Madam Speaker, the 17 per cent penalty interest rate which is imposed on late taxpayers contains a significant disincentive to discourage what, in effect, could be the use of tax moneys for normal financing arrangements. There is a heavy penalty factor in there, and it is a deliberate penalty, so that rate and tax payers do not put their tax last and use those funds, in effect, to finance other ventures or put them to some other use. So, there is a specific penalty provision in there.
The effect of Mr Kaine's amendment, were it to be passed, would be to put the interest on the specific refunds that are referred to in Mr Kaine's amendment at variance with all other refunds of overpaid tax. Madam Speaker, I do not think that that is a very sensible course of action to follow. The current provisions of the Act already require the payment of interest in the circumstances that are envisaged in Mr Kaine's amendment; but they require that payment to be at the rate of 5.25 per cent. That is the rate that is in use. That rate ensures that the real value of the overpayment is maintained.
Madam Speaker, I want to raise a couple of other issues, which you may feel are somewhat hypothetical. The fact of the matter is that, in collecting, imposing and assessing taxes, the Commissioner for Revenue is carrying out his duty as a statutory officer. His job is to collect taxes. Madam Speaker, I know that the Commissioner for Revenue is pretty scrupulous in his assessment of whether tax is due or not. As the Treasurer, I can say that I rely on a Commissioner for Revenue who does not beat about the bush but who applies himself energetically to his duty, which is to collect revenues. No government could put up with a Revenue Commissioner who shilly-shallied or was inclined to give people the benefit of the doubt on the slightest of evidence. I expect him to collect the taxes. He knows that it is his duty to collect the taxes, and that is what he does.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .