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Legislative Assembly for the ACT: 1998 Week 11 Hansard (10 December) . . Page.. 3433 ..

MS CARNELL (continuing):

The premium component will be 8 per cent per annum and is intended to act as a disincentive to a taxpayer using the Government as a de facto lending institution. The Commissioner for ACT Revenue is empowered to remit either or both components, depending upon the reasons behind the late payment.

In instances where the non-payment of a tax liability is detected, penalty tax may also be applied. The Bill proposes that this rate be 25 per cent of the unpaid tax, or 75 per cent in instances of deliberate non-payment. Lower penalty rates will apply where a taxpayer discloses a tax liability before either notification or commencement of an audit. No penalty tax will be payable where the Commissioner for ACT Revenue is satisfied that the non-payment was not deliberate or did not result from a failure of the taxpayer to take reasonable care to comply. There will be no liability for interest or penalty tax of less than $20. The rates for both interest and penalty tax adopt a realistic approach to ensuring timely compliance with taxation laws. The new penalties substantially reduce the current more severe imposts of up to 200 per cent, while reflecting a balance between cost recoupment and encouraging taxpayers to meet their obligations.

The Bill will also allow the Commissioner for ACT Revenue to approve special tax return arrangements in respect of specific taxpayers, groups of taxpayers or specified agents. New South Wales currently uses these provisions to allow solicitors to act as agents of both the Revenue Office and their clients by assessing certain documents for duty, stamping the document and sending the duty by way of weekly or monthly return. This provision will also provide government and business with greater flexibility in complying with tax legislation, allowing future developments in electronic communications to be harnessed.

The opportunity has been taken to amend the current grouping provisions in line with recent New South Wales amendments, to limit the grounds on which the commissioner may exclude a member from a group. Under the Bill, exemption is possible only where members are grouped through the common use of employees. Exclusion is no longer possible where members are commonly controlled through majority ownership. This would ensure, for payroll tax purposes, that commonly owned and controlled groups of companies can only claim a single tax threshold.

Mr Speaker, the Bill contains an important general anti-avoidance provision. The Bill provides that where a person uses a tax avoidance scheme, as defined in the provision, the Commissioner for ACT Revenue may determine the amount of tax that would have been payable had the scheme not been in place and may make such assessments as are necessary. Any such assessment would be subject to objection and appeal to the Administrative Appeals Tribunal. The Bill also subjects the Crown to the various administrative provisions of the Bill, for example, the imposition of penalties for late payment to which other taxpayers are subject.

In conclusion, Mr Speaker, this Bill will bring the administration of ACT tax laws more into line with that of New South Wales, providing benefits to taxpayers operating in both jurisdictions. The Bill provides a clear message that the Government is committed to reducing the compliance costs for businesses operating in the ACT.

Debate (on motion by Mr Quinlan) adjourned.

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