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TAXATION ADMINISTRATION REGULATIONS (AMENDMENT) 1994 NO. 198

TAXATION ADMINISTRATION REGULATIONS (AMENDMENT) 1994 NO. 198

EXPLANATORY STATEMENT

STATUTORY RULES 1994 No. 198

ISSUED BY THE AUTHORITY OF THE ASSISTANT TREASURER

Taxation Administration Act 1953

Taxation Administration Regulations (Amendment)

These Regulations are made under section 18 and 16A of the Taxation Administration Act 1953 (the Act). Section 18 authorises the Governor-General to make Regulations for the purposes of the Act. Section 16A of the Act specifically authorises the making of Taxation Administration Regulations dealing with the payment of liabilities under any Act (or Regulations) of which the Commissioner has the general administration. The liabilities covered by these Regulations include taxation debts, levies, charges and child support debts.

Prior to the amendments, Regulations made under various laws set out how payments should be made to the Commissioner of Taxation (including child support payments to the Commissioner in his capacity of Child Support Registrar). Payments were made directly to the Commissioner or to a limited number of authorised agents (eg, the Reserve Bank of Australia). The Regulations also required payments to be made in the form of cash, bank notes, postal orders or cheques. In the case of payments of income tax, group certificates or tax stamps could also be used.

These Regulations simplify the various Regulations dealing with payments to the Commissioner by consolidating the payment arrangements contained in various laws administered by the Commissioner in the Taxation Administration Regulations. The redundant Regulations to the various Acts have been omitted.

The Regulations give payers more flexibility in the way payments may be paid to the Commissioner. In particular, the Regulations allow payers to make payments to the Commissioner at a wider range of specified agents, such as Australia Post, using the Agency Bill Payment Service (BillPay) which was recently introduced by the Australian Taxation Office (ATO).

The Regulations also allow payments to be made to the Commissioner using electronic funds transfer (EFT). EFT allows payers to pay amounts to the Commissioner by electronically depositing amounts at the Reserve Bank of Australia using the Direct Entry system established by the major banks.

In addition to the above, the Regulations streamline and simplify the rules dealing with the payment of debts to the Commissioner. Under previous arrangements, the requirements for payment of debts were contained in the Regulations to the various Acts administered by the Commissioner. The proposed Regulations replace those Regulations with one set of rules contained in the Taxation Administration Regulations.

The Regulations dealing with how payments are made to the Commissioner, provision and retention of information, receipts and the payment of postage have been simplified to remove redundant Regulations and to reflect modem business practices. The language used in the Regulations has also been brought up to date.

The Regulations, apart from Subregulation 3.2 and Regulation 4, commence from the date of gazettal. Subregulation 3.2 and Regulation 4, which commenced on 1 July 1992, do not affect the rights of any person (other than the Commonwealth) in a manner prejudicial to that person, nor do they impose any liability on such person. They do not contravene subsection 48(2) of the Acts Interpretation Act 1901.

A detailed explanation of the Regulations is set out in the Attachment.

Attachment

Details of amendments to Taxation Administration Regulations

Regulation 1 - Commencement

Regulation 1 makes it clear that Subregulation 3.2 and Regulation 4 commence on 1 July 1992. The commencement of these Regulations on 1 July 1992 does not impose a liability on any person, nor does it adversely affect any person's rights (other than the Commonwealth).

The remainder of the Regulations commence on gazettal of these Regulations.

Regulation 2 - Amendment

Regulation 2 makes it clear that the Taxation Administration Regulations are being amended.

Regulation 3 - Regulation 2 (Interpretation)

Regulation 3 provides that the definition of "Commissioner" in Regulation 2 of the Taxation Administration Regulations also includes the Commissioner in his capacity as the Child Support Registrar under the Child Support (Registration and Collection) Act 1988. Section 16A of the Act provides that the Taxation Administration Regulations can apply to the payment of all liabilities arising out of legislation for which the Commissioner has the general administration. It is therefore necessary to extend the definition of "Commissioner" to include his or her role as Child Support Registrar.

The Regulation also provides that "branch of the Australian Taxation Office", unless a contrary intention appears, refers to any place of business of the Commissioner or a Deputy Commissioner that is open to the public. For example, branches, regional offices and shop fronts will be treated as branches of the Australian Taxation Office (ATO). ATO premises that are not open to the public, such as computer centres, do not fall within this definition as they are separately located and are not open to the public.

The Regulation also includes a definition for "debt" that, unless the contrary intention appears, is taken to be an amount that a person is required to pay to the Commissioner under an Act or Regulations for which the Commissioner has the general administration. The definition covers all liabilities arising under legislation for which the Commissioner has the general administration including the Child Support (Registration) and Collection) Act 1988.

Regulation 4 - New Regulations 20 and 21

Payment of a debt

Regulation 4 inserts new Regulation 20 that provides for how and where the payment of a debt can be made to the Commissioner. Payments of debts must be made in one of the following ways:

•       Posting or delivering the amount to any branch of the Australian Taxation Office (see Regulation 3) which has facilities for the collection of payments [new paragraph 20(1)(a)].

•       Delivering the amount to the Reserve Bank of Australia, to the High Commissioner of the Commonwealth of Australia in the United Kingdom or to the Australian Trade Commissioner for the United States of America [new paragraphs 20(1)(b),(c) and (a)].

Payments are not to be sent to the agencies by mail. If a payment is to be made by mail, it should be posted directly to a branch of the ATO that has facilities for the acceptance of payments [see new paragraph 20(1)(a) above].

•       Depositing the amount of the debt at a branch of the Reserve Bank in accordance with arrangements made by the Commissioner for paying debts at the Reserve Bank [new paragraph 20(1)(e)].

New paragraph 20(1)(e) provides that the Commissioner may make appropriate arrangements with payers and financial institutions for the debts to be paid by depositing the amount due at a branch of the Reserve Bank of Australia. This paragraph facilitates the payment of debts using electronic funds transfer (EFT).

Under the EFT arrangements, payers can pay their debts to the Commissioner by electronically transferring the amount of the debt to the Reserve Bank of Australia. The payer will be taken to have paid the debt to the Commissioner when the amount is deposited with the Reserve Bank.

The Commissioner will make appropriate arrangements with financial institutions and payers wishing to pay debts using EFT. Payments using EFT will only be accepted if those arrangements are complied with.

•       Paying the amount in accordance with arrangements made by the Commissioner for paying debts [new paragraph 20(1)(t)].

New paragraph 20(1)(1) ensures that, in addition to the above methods of paying debts, the Commissioner may make arrangements for payments in other ways. In particular, this paragraph facilitates the payment of debts using specified agents, such as Australia Post. The provision of payment facilities through specified agents is known as the Agency Bill Payment Service (BillPay). BillPay has recently been introduced by the ATO to give payers more flexibility in how they may pay amounts to the Commissioner.

Under BillPay, payments to the Commissioner are made when the payment is made to the agency authorised by the Commissioner to collect the payment.

The Commissioner is not required to accept part payments of a debt. Debts must be paid in full, unless the Commissioner gives written permission to make a part payment. [new Subregulation 20(2)].

A person may ask for a receipt

Regulation 4 also inserts new Regulation 21 that empowers, the Commissioner to issue receipts for payments made to the Commissioner. Receipts need only be issued upon request by the person making the payment.

Regulation 5 - New Regulations 22 and 23

Information about a debt

Regulation 5 inserts new Regulation 22 to require a person paying a debt to provide or retain information about the payment.

New Paragraph 22(1)(a) requires the person making payment, other than by using EFT (see new Subregulation 22(2) discussed below) to give the Commissioner information identifying the amount and nature of the payment.

If the Commissioner has given the person a form in which to provide the necessary information - that form must be used. For example, employers who make payments of group tax are provided with forms to accompany their payments (remittance advices). Employers provided with these forms must provide the information required in the form. [new Paragraph 22(1)(b)]

Under the EFT arrangements, payments are made electronically without the use of hard copy forms or remittance advices. Instead the payment, accompanied by the necessary information, is electronically transmitted to the ATO via the Reserve Bank.

New Paragraphs 22(2)(a) and (c) require the person making the payment to retain a record identifying the amount and nature of the deposit for a period of 12 months from the date of payment. If the Commissioner has given the person a form in which to make the record, for example a remittance advice, the information about the payment must be kept on that form. [new Paragraph 22(2)(b)]

Payment of postage on mail to the Commissioner

Regulation 5 also inserts new Regulation 23 dealing with the payment of postage on mad sent to the Commissioner.

New Subregulation 23(1) requires that every article of mail posted to a branch of the ATO carry the correct prepaid postage.

Attachment

New Subregulation 23(2) authorises the Commissioner to recoup any postage contributions he makes because a person sends unstamped or insufficiently stamped mail. The Commissioner may deduct the amount of his contribution from any payments that person makes in relation to a debt.

The balance of the payment, after the Commissioner's contribution is deducted must be credited towards the payment of the person's debt. [New Subregulation 23(3)]

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