The Rudd Government has moved to boost taxpayer certainty through the repeal of over 100 provisions in the income tax laws that provide the Commissioner of Taxation with an unlimited period to make an amendment to a taxpayer's assessment.
"The removal of these provisions will boost certainty for taxpayers – a core policy goal of the Rudd Government in the tax area," said the Assistant Treasurer.
"The removal of these unlimited amendment powers will ensure taxpayer affairs for a particular year become final at the conclusion of the standard amendment period of two to four years – and that's a great improvement," said the Assistant Treasurer.
This finite amendment period will apply unless there has been fraud or evasion.
In addition, the Assistant Treasurer has also today released the Inspector-General of Taxation's (IGT) Review into delayed or changed Australian Taxation Office views on significant issues.
The report examines taxpayer concerns about perceived Tax Office "U-turns", being delayed or changed approaches on significant interpretative matters or in relation to past administrative practices.
The IGT report has found that while the Tax Office may have acted within the law, there are circumstances where taxpayer perceptions of Tax Office changes in views or practices and their related delays, may be justified.
In his report, the IGT made five recommendations.
The first recommendation is that the Government consider whether the current legislative framework provides effective transparency and certainty for taxpayers when the Tax Office retrospectively applies new, changed or clarified views.
"In relation to this recommendation, the Government agrees that transparency, clarity and certainty are critical principles with the administration of tax matters," said the Assistant Treasurer.
"As such, it's important we consider this recommendation in the context of the overall response to the independent tax review, which is what we will do."
The remaining four recommendations were administrative in nature and directed to the Tax Office, namely:
Refining the Tax Office process and criteria for deciding whether to apply new, changed or clarified Tax Office views retrospectively (Recommendations 2 and 4);
Improving Tax Office engagement with the community while it develops technical views (Recommendation 3); and
Minimising the time period occurring before the Tax Office identifies compliance concerns and the time taken in finalising Tax Office views (Recommendation 5).
The Tax Office broadly agrees with each of these recommendations.
"These administrative recommendations will improve the level of transparency and taxpayer engagement in the development of technical views of the tax law," said the Assistant Treasurer.
"The Tax Office has informed me that it will be developing, in close collaboration with the taxpayer community, its administrative practice concerning the circumstances in which it seeks to apply its views retrospectively by incorporating specified process steps and criteria set out in the IGT report."
"It has also indicated that it will improve its proactivity in seeking to identifying areas of uncertainty through improved engagement with taxpayers and their representatives."
"These are all very positive steps."
"I thank Mr Ali Noroozi, the Inspector General of Taxation, the Tax Office and all other stakeholders involved in this work."
The IGT report is available at www.igt.gov.au.