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Legislative Assembly for the ACT: 1997 Week 4 Hansard (8 May) . . Page.. 1106 ..

MRS CARNELL (continuing):

Section 95D provides that tax paid under a taxation law prior to a court finding the law to be invalid cannot later be recovered by the taxpayer on the ground of that invalidity. The provision does not apply in respect of an overpayment which would be refunded if the tax law had continued to be valid. Previous legal interpretations have all cast doubt on the effectiveness of these provisions to protect Territory revenue from a claim for refund under certain circumstances. For example, where an application is made direct to a court for a refund of tax paid, or where the application for a refund is for tax amounts paid prior to the introduction of the refund or recovery of revenue provisions in 1993.

Amendments in the Taxation (Administration) (Amendment) Bill 1997, therefore, will:

provide that a court cannot refund tax paid without the taxpayer satisfying the court that the impost has not been passed on to third parties or, if it has, the third parties have been reimbursed;

require a taxpayer to whom a refund is to be provided following court action to provide the court with an undertaking that the tax impost will not be passed on to any other person - the penalty for not complying with the undertaking is an amount equal to double the amount charged or recovered from the third party;

require a taxpayer to whom a refund is to be provided by the commissioner to provide the commissioner with an undertaking that the tax impost will not be passed on to any other person - the penalty for not complying with the undertaking is an amount equal to double the amount charged or recovered from the third party;

provide that a taxpayer may apply to the commissioner for a refund of an amount paid in excess of the tax payable under proposed subsection 95D(2) of the Act, even though the law has been declared invalid by the courts and the tax payable is precluded from being recovered;

provide a taxpayer with the right of appeal to the Administrative Appeals Tribunal where the commissioner is not satisfied that a taxpayer has not charged to, recovered from, or repaid a revenue amount to a third party under proposed subsection 95C(1) of the Act, or where an adverse decision is made by the commissioner on a refund application under proposed subsection 95D(2) of the Act; and

clarify, for the sake of removing any doubt that existed, that Part XIIA of the Act - the refund or recovery of revenue provisions - applies to tax paid and legal proceedings commenced before or after the commencement of this Part in 1993.

These proposed measures, if introduced, will correct anomalies in the existing legislation and ensure greater protection of ACT revenue.

Debate (on motion by Mr Whitecross) adjourned.

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