Category: Law

Review of taxation secrecy and disclosure

The Treasurer recently announced that new legislation to be introduced into parliament will help agencies involved in Project Wickenby share information to aid law enforcement. Now Treasury has released a discussion paper on the review of taxation secrecy and disclosure provisions.

The purpose of the review is to improve the laws that protect taxpayer information and allow disclosure in limited circumstances only in accordance with a prescribed legal process.

The discussion paper draws attention to the complexity and uncertainty caused by the different tax secrecy and disclosure provisions which exist across several provisions including superannuation, excise, Australian Business Number (ABN) and Tax File Number (TFN) legislation. The paper proposes that the various tax law secrecy and disclosure provisions should be standardised into a single piece of legislation such as the Taxation Administration Act 1953.

As well as investigating the principles governing the standardisation of secrecy and disclosure laws, the discussion paper looks at disclosure of taxpayer information, specifically for:

* administration, design and maintenance of the tax laws
* the purpose of protecting public finances
* the purpose of other Commonwealth, state and territory laws

Four possible new disclosures of taxpayer information for public comment are also discussed:

* disclosure to third parties with taxpayer consent
* disclosure to law enforcement and intelligence agencies
* disclosure to the Tax Commissioner as an employer
* disclosure to third parties where a duty is owed to them

The government is seeking submissions by interested parties on the proposals and issues canvasses in the discussion paper by 29 September 2006.

CPA Australia has prepared a summary of the proposals. It can be downloaded here

Melbourne night club manager in GST identity fraud

A Melbourne night club manager was yesterday sentenced to three years jail by the Victorian County Court for GST fraud of over $3.7 million.

Mark William Rowson, 39, pleaded guilty to two counts of obtaining and attempting to obtain a financial benefit by deception.

Rowson stole the identities of two individuals and used them to set up and register real companies.

Between September 2002 and October 2004 he then created false documentation on behalf of the companies and deceived a large accounting firm into submitting false activity statements to the Tax Office.

Refunds of $2.4 million were paid into various accounts and further refunds of $1.1 million were stopped prior to issue.

A joint investigation with the Australian Federal Police led to Rowson’s arrest in October 2004.

Acting Tax Commissioner Jennie Granger said identity crime is an emerging threat to the revenue system.

“We are seeing an increase in the use of identity crime to commit tax fraud and we’re working closely with other agencies to combat the issue,” Ms Granger said.

Mr Rowson will serve a minimum of 18 months before being eligible for parole.

Upon conviction, a reparation order was issued and Rowson was ordered to pay the sum of $2,447,271.80.

Simplifying super plan: Govt’s final decisions on transitional concessions

In a surprise announcement [5.9.2006], the Treasurer and Assistant Treasurer confirmed that the Government will proceed with its superannuation simplification proposals, which include the removal of end benefits tax for those over age 60 from 1 July 2007 and the abolition of RBLs and age-based contribution limits.

The Government also announced its ‘final decisions’ on further transitional concessions (some of which are very generous) for its 2006/07 Budget superannuation simplification plan. In particular, Mr Costello announced the following transitional arrangements, which will be put in place to make the transition to the new superannuation system easier:

  • Undeducted contributions — people will be able to make up to $1m of post-tax undeducted contributions between 10 May 2006 and 30 June 2007. The $150,000 annual limit on post-tax contributions will now commence from 1 July 2007 (instead of 10 May 2006). People aged less than 65 will be able to bring forward two years of contributions, enabling $450,000 to be contributed in one year. In addition to the annual $150,000 cap, people will be able to contribute a lifetime limit of $1 million from the sale of small business assets held for 15 years and settlements for injuries resulting from permanent disablement;
  • indexation of contribution limits — administration of contribution caps will be streamlined and indexed to AWOTE in $5,000 increments;
  • employer ETPs — transitional arrangements until 1 July 2012 for employer ETPs specified in existing employment contracts as at 9 May 2006;
  • employee invalidity benefits — concessional tax treatment will be extended to the self-employed;
  • TFNs — quotation of a TFN for employment purposes to be treated as being for superannuation purposes; people allowed until 30 June 2008 to quote their TFN before withholding tax will apply; a refund of any tax withheld for a period of up to four years; and removal of the $1,000 threshold for accounts commenced from 1 July 2007;
  • untaxed superannuation schemes — the concessional amount of lump sum benefits from an untaxed source will be increased from $700,000 to $1 million; and
  • SMSFs supervisory levy — to be increased to $150 (up from $45).

The Treasurer also said the Government will not be proceeding with the numerous other issues raised in the consultation process.

According to the Government, those submissions would have imposed a significantly higher cost to revenue and added complexity. Legislation to implement the measures is expected to be introduced into Parliament before the end of 2006.

The full text of the Treasurer and Assistant Treasurer, joint press release No 093, 5 September 2006 can be found on the Treasurer’s website.