The Australian Taxation Office (ATO) is under heavy fire from the Federal Government over its treatment of mass-marketed tax avoidance schemes which have been sold to as many as 65,000 investors in Western Australia, who now face tax penalties or commercial losses, or in some cases both at once.
The Government is fearful of an electoral backlash from voters who think the Tax Office has been dilatory, heavy-handed and obscure in its advice.
The schemes in question usually focus on agricultural projects, and are marketed with glossy prospectuses which sometimes include advance tax rulings given by the ATO or approvals from the Australian Securities and Investments Commission (ASIC). Investors have apparently mixed the two up, believing in many cases that ASIC approval (easily obtained simply by depositing a prospectus, since ASIC has given up trying to vet brochures due to pressure of work) is equivalent to ATO approval. Thus, an investor, no doubt helped along by deliberately muddy wording on the part of promoters, may believe that ASIC approval on its own is a guarantee of both commercial viability and tax-effectiveness; or that ATO approval, which does indeed copper-bottom the tax aspects, is also a guarantee of commercial viability.
The ATO has not helped its case by being extremely slow in responding to calls for action, while at the same time targeting thousands of investors with massive tax bills they didn't expect to get.
The Assistant Treasurer, Senator Rod Kemp, said last night he expected to hear from the ATO soon on measures to "curtail the promotion of [mass-marketed] tax avoidance schemes".
West Australian Senator Winston Crane has called for an independent authority to assess the individual circumstances of affected taxpayers. "None of them trust the ATO any more," he said. "It may be more perception than real, but it's critical.''
Senator Crane said the Tax Office had been slow in advising people where they stood. "They just came down as if they were a bunch of little Hitlers," he said.
Senator Shayne Murphy, the chairman of the Senate committee that this week issued a damning report on the ATO's performance, said last night it had had more than a year to propose how to deal with tax-minimisation scheme promoters. "I know they've been busy, but I would have thought the ATO would be in a position to report back by May, given the history involved," he said.
Deputy tax commissioner Mr Kevin Fitzpatrick said yesterday that the ATO was nearly ready to make recommendations, which would involve ASIC. "Any regime that the Government will consider will have to look at the laws ASIC administers," he said.
But Mr Fitzpatrick said some of the blame had to be levelled at the advisers to participants in the schemes.
"Tax advisers have a responsibility to advise their clients from a tax point of view of the risks that might be there in the future," he said. But he could not clarify which types of promoter would be made liable to sanctions - these could apply to advisers such as tax consultants and accountants, along with the directors, managers and sales representatives of schemes.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment