Page 4783 - Week 13 - Thursday, 28 November 2019
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I want to focus on the other two categories: people who get a tax debt because of either hardship or mistake. Frankly, with the size of back tax debt I have seen some people end up with because of a mistake or bad tax advice, there is sometimes not much difference between the two categories. Bad advice 10 years back can push someone into significant hardship when it comes to light.
People in these situations are not deliberately trying to rip off the government. Instead they have found themselves in a difficult situation and they need a way out of it. They need a different approach from tax avoiders and they need to be dealt with sensitively and carefully.
I have heard from quite a few people in this situation over the past three years and I am not convinced that the revenue office has always been getting this one right. That is one of the reasons why I put up a hardship motion in November last year, which sought to change the revenue office’s practices and their approach when working with people in hardship.
An important example of where an approach needs to be considered carefully is the size of the penalty tax and interest charged. Yes, penalties and interest do need to apply so that potential tax avoiders have no financial incentive to cheat on their tax. However, we are ending up with people in hardship and people who have made a mistake facing penalties and interest bills far larger than the outstanding tax to be paid. This moves people from a situation where they can gradually pay off their back taxes to a situation where—and I am aware of some instances—they lose their home. The revenue office has discretion here, and I am not sure that they are using it often enough. A sensitive approach starts with communication with taxpayers and people who provide advice to taxpayers. That is why my motion last year covered redesigning the rates notice and writing to concession ratepayers to make sure that they are aware of the support available to them.
In the context of this bill, the issue is how the government communicates with people when tax laws change. I have been contacted several times by people who ended up with a large tax debt because they thought they were doing the right thing, but they were not. In one case my office spoke to someone whose rental arrangements were exempt from land tax several decades ago when he started renting out part of his property, but legislation changes over time had changed that, and he had not realised it. How would he have known about it?
In that regard I would like to draw members’ attention to page 3 of the explanatory statement where it says, in relation to one of the changes, that “information about these amendments will be available on the ACT Revenue Office website”. I hope that the revenue office’s communications regarding the changes in this bill will go beyond putting information on the revenue office’s website. The website is useful, but that is a bare minimum. I would urge the government to at least advise tax advisers, who can then alert their clients.
In conclusion, I urge the government to not only be efficient at collecting tax and administering the tax system, but also to keep the messy realities of life constantly in
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