The announcement comes soon after revelations that Robert Gerard, Liberal Party donor and member of the board of the Reserve Bank of Australia, had allegedly covered up tax evasion, and had failed to cooperate with a long-running ATO investigation into his affairs.

However, committee chairman Bob Baldwin has denied that the inquiry is connected to allegations of favouritism by the ATO in certain investigations, and stated that the committee was merely doing its job.

“It is a number of years since the Public Accounts Committee last undertook a comprehensive review of taxation administration,” Mr Baldwin said.

He went on to state that the enquiry will be split into two parts, running concurrently. Part A of the enquiry will be looking at the administration by the Australian Taxation Office (ATO) of the Income Tax Assessment Act 1936 and 1997, with particular reference to compliance and the rulings regime. This will include:

• The impact of the interaction between self-assessment and complex legislation and rulings;
• The application of common standards of practice by the ATO across Australia;
• The level and application of penalties, and the application and rate of the General Interest Charge and Shortfall Interest Charge; and
• The operation and administration of the Pay As You Go (PAYG) system.

Part B of the enquiry will look at the application of the Fringe Benefits Tax (FBT), including any ‘double taxation' consequences arising from the intersection of fringe benefits tax and family tax benefits.

The committee emphasised that it will not be reviewing individual case studies or grievances with the Australian Taxation Office.

The committee invites public submissions on both parts of the inquiry. The closing date for submissions is Friday, 24 February 2006.