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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
The Taxation Administration (Consequential Amendments) Bill 1996 is
cognate with this Bill.
Debits Tax Act I990
Health Insurance Levies Act 1982
Land Tax Act I956
Land Tax Management Act 1954
Parking Space Levy Act I992
Pay-roll Tax Act 1971
Revenue Laws (Reciprocal Powers) Act 1989
a regulation under any of those Acts.
These laws and the proposed Act are collectively referred to as the taxation
laws in this explanatory note.
Part 1 contains clauses 1-6 which make provision for the name of the
proposed Act, its commencement and the definitions of certain words and
expressions used in it. The Part lists the taxation laws to which the proposed
Act applies and provides that the proposed Act is to bind the Crown.
Part 2 Purpose of Act and relationship with other
taxation laws
Part 2 contains clause 7 which describes the purpose of the proposed Act and
indicates how it is to relate to the other taxation laws.
Part 3 Assessment of tax liability
Part 3 contains clauses 8-17. The Part deals with the assessment or
reassessment of the tax liability of a taxpayer under a taxation law. It confers
a general power on the Chief Commissioner of State Revenue to make
assessments (including reassessments) and specifies the information on
which assessments are to be made. It provides for the issuing of notices of
assessment. It enables the withdrawal of an assessment. An assessment is not
invalidated because a provision of a taxation law has not been complied with.
Part 4
Refunds of tax
Part 4 contains clauses 18-20. The Part contains a general requirement that
the Chief Commissioner make a refund of tax to a taxpayer if the taxpayer
has paid more tax than is shown in a notice of assessment of the taxpayer's
liability.
Part 5
Interest and penalty tax
Division 1
Interest
Division 1 contains clauses 21-25. It imposes interest on tax defaults (a tax
default being defined by the proposed Act as a failure by a taxpayer to pay, in
accordance with a taxation law, the whole or part of tax that the taxpayer is
liable to pay). The interest rate comprises a market rate component
(determined by reference to the rate applicable to tax defaults under the
Commonwealth Income Tax Assessment Act 1936) and a premium component
(currently proposed to be 8% per annum). The interest rate is to prevail over
the interest rate otherwise payable on a judgment debt. The Chief
Commissioner is given power to remit interest.
Explanatory note page 2
Division 2
Penalty tax
Division 2 contains clauses 26-33. It imposes penalty tax on tax defaults.
The initial amount is 25% of the amount of tax unpaid but this may be
increased or decreased depending on the circumstances. The following Table
contains a summary of the provisions of Division 2.
The Chief Commissioner is given power to remit penalty tax.
Part 6
Returns
Division 1
General
Division 1 contains clauses 34-36. These provisions deal generally with
returns that are required or permitted to be lodged under the taxation laws.
They provide for the form of returns, the time of their lodgment and
extensions of time for lodgment.
Division 2
Approval of special tax return arrangements
Division 2 contains clauses 37-42. These provisions enable the Chief
Commissioner to approve of special arrangements for the lodging of returns
and payment of tax under the taxation laws. They deal with applications for
approval, determination of applications, imposition of conditions of approval,
the variation and cancellation of approvals and the effect of approvals.
Part 7
Collection of tax
Part 7 contains clauses 43-49. It provides for the payment of tax to the Chief
Commissioner, the recovery of taxes as a debt, recovery from persons who
are jointly or severally liable, collection of tax from third parties, and the
making of arrangements between the Chief Commissioner and taxpayers for
the payment of tax within an extended period or by instalments, or both.
Explanatory note page 3
Part 8
Record keeping and general offences
Part 8 contains clauses 48-59. It imposes requirements for record-keeping,
the form in which records are to be kept, accessibility to records and the
period for which records are to be retained. It creates offences for knowingly
giving false or misleading information to a tax officer and for deliberately
omitting information from a statement so that the statement is rendered false
or misleading, for failing to lodge documents required to be lodged by a
taxation law and for falsifying or concealing an identity or an address. A
general defence is provided to a person who proves that reasonable care was
taken to comply with the relevant requirement or that the requirement was
contravened solely because of circumstances beyond the person's control.
Part 9
Tax officers, investigation and secrecy provisions
Division 1
Tax officers
Division 1 contains clauses 60-70. It creates the offices of Chief
Commissioner of State Revenue and Commissioner of State Revenue. It
confers on the Chief Commissioner the general administration of the taxation
laws. It enables the appointment of staff and the use of consultants and
contractors. It enables the delegation of the Chief Commissioner's functions.
It provides for the appointment of persons to be authorised officers for the
purposes of the taxation laws. It relieves the Chief Commissioner and tax
officers from personal liability for things done in good faith for the purpose
of executing the taxation laws.
Division 2
investigation
Division 2 contains clauses 7180. It confers investigative powers on the
Chief Commissioner, including powers to require information, the attendance
of persons to give evidence and the production of records, and a power of
entry onto premises. It makes it an offence to obstruct an authorised officer in
the exercise of an investigative function or to impersonate an authorised
officer. A general defence is provided to a person who establishes that the
person could not, by the exercise of reasonable diligence, have complied with
the requirement concerned or that the person complied with the requirement
to the extent of the person's ability to do so.
The provisions of Division 2 do not affect legal professional privilege.
Explanatory note page 4
Division 3
Secrecy
Division 3 contains clauses 81-85. It generally prohibits tax officers from
disclosing to others information obtained by the tax officers in the course of
their duties and sets out some limited circumstances in which the disclosure
of information is permitted.
Part 10 Objections and appeals
Division 1
Objections
Division 1 contains clauses 86-95. It confers a right of objection on a
taxpayer who is dissatisfied with an assessment that is shown in a notice of
assessment or with certain decisions of the Chief Commissioner under the
taxation laws. The Division sets out the procedures for the making and
determination of objections. The making of an objection does not prevent the
recovery by the Chief Commissioner of the tax concerned pending the
determination of the objection.
Division 2
Appeals
Division 2 contains clauses 96-103. It confers a right of appeal to the
Supreme Court on a taxpayer who is dissatisfied with the Chief
Commissioner's determination of, or failure to determine, the taxpayer's
objection. The Division sets out the procedures for the making and
determination of appeals.
Division 3
Refund of amounts and payment of interest
following successful objection or appeal
Division 3 contains clauses 104 and 105. It requires the Chief Commissioner
to refund amounts found, following a successful objection or appeal, to have
been paid in excess of a lawful requirement together with interest.
Division 4
Chief Commissioner may state case
Division 4 contains clause 106 which enables the Chief Commissioner to
state a case on a question of law to the Supreme court.
Part 11
Miscellaneous provisions
Part 11 contains clauses 107-128. The Part contains miscellaneous
provisions relating to the administration of the taxation laws. It contains
provisions for the manner in which payments of tax may be made to the
Chief Commissioner, the valuation of amounts expressed otherwise than in
Australian currency, the writing off of tax and the appropriation of the
Consolidated Fund for amounts that the Chief Commissioner is authorised or
Explanatory note page 5
required to pay under the proposed Act. It enables the Chief Commissioner to
require a corporation to appoint a natural person resident in New South Wales
as the corporation's public officer for the purpose of serving documents. It
requires a liquidator to notify the Chief Commissioner of the liquidator's
appointment. It provides for the service of documents on and by the Chief
Commissioner. It contains a number of evidentiary provisions. It provides for
the commission of offences by persons involved in the management of
corporations and increases the maximum penalty that may be imposed for
offences committed by corporations. It specifies how proceedings for
offences are to be taken. It contains a regulation-making power. It requires
that a review of the proposed Act be undertaken after 5 years.
Schedule 1
Savings, transitional and other provisions
Schedule 1 contains savings, transitional and other provisions consequent on
the enactment of the proposed Act.
Explanatory note page 6