Australia To Harmonize Indirect Tax Assessment

by Mary Swire, Tax-News.com, Hong Kong

24 August 2011

In January the Australian Assistant Treasurer Bill Shorten released for public consultation exposure draft legislation to harmonize the self actuating system for goods and services tax (GST), wine equalization tax (WET), luxury car tax (LCT) and fuel tax credits with the income tax system of self assessment.

In response to submissions, the Government announced in the 2011-12 Budget that the start date for the measure would be deferred to allow for further consultations, and the Assistant Treasurer has now released revised exposure draft legislation for public consultation.

Shorten said at the time: "The amendments will reduce the complexity of the tax law associated with having different administration regimes for indirect taxes and income tax."

"Bringing indirect taxes into a self-assessment regime will decrease the need for advisors and administrators to have specialist knowledge of unique income tax or GST administration provisions. This could, in turn, result in a reduction in compliance and administrative costs in the longer-term," he added.

The revised draft legislation seeks to address some of the issues arising from the public consultation, and the amendments contained in the draft legislation will:

• Harmonize the self actuating system for GST, LCT, WET and fuel tax credits with the income tax system of self assessment through the establishment of a set of generic assessment provisions;
• Allow for the four-year period of review to be refreshed in respect to particulars that have been amended;
• Allow the Commissioner to make a determination allowing a taxpayer to correct errors from a preceding business activity statement on their current business activity statement;
• Clarify that LCT and WET are included in the calculation of the net amount;

These proposals will give effect to recommendations 19, 21 and 42 of the Board of Taxation’s Review of the Legal Framework for the Administration of the Goods and Services Tax.

Interested parties are invited to comment on the exposure draft material, and the closing date for submissions is September 20, 2011.

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