Carmody Leaves Unfinished Business At The ATO

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

11 November 2005

Despite presiding over some major changes to the Australian tax system over the last thirteen years, outgoing Tax Commissioner Michael Carmody has stated that the country's tax law remains overly complex, and will become even more opaque as long as special interest groups continue to demand special tax concessions.

In an announcement on Thursday, Australian Treasurer Peter Costello confirmed that Carmody will take up a new post as head of the beleaguered Customs department, which is in the state of some turmoil as the agency struggles to implement a new cargo clearance system which has left a backlog of goods at major ports such as Sydney and Melbourne.

"Customs was looking for somebody who could bring fresh vigour," the Treasurer told reporters.

"He was looking for a new challenge after 13 years (as tax commissioner). He raised this with me. It seemed to me to be a perfect fit," Mr Costello added.

Paying tribute to Carmody's accomplishments at the helm of the ATO, Mr Costello credited him with steering through some major changes to Australia's tax collection system, such as the implementation of the goods and services tax.

"In that role he has modernised the approach of the Australian Taxation Office; led the ATO in successfully implementing the largest reform of Australia’s tax system; and, implemented a structured approach to compliance, including the publication of annual compliance programs," Mr Costello noted.

However, according to a report in The Australian newspaper, Carmody has stated that his successor as head of the ATO, Michael D'Ascenzo, will preside over a tax system that continues to be plagued by complexity from top to bottom.

"There's no doubt the law is complex, that it affects the complexity of business," Mr Carmody observed.

"It runs right through, both in the treatment of income (and) the way income is derived. Our role is to make the law work," he noted.

Whilst in charge of the ATO, Carmody initiated the increasing use of technology to help simplify the process of computing and paying taxes.

Nonetheless, according to Carmody, this has merely served to "mask" the real complexity of the tax system, and he warned the situation will deteriorate while certain businesses continue to demand special treatment.

"Many of the people who talk about (complexity) look to get their industry recognised as special - (this) does run against simplicity of law," he remarked.

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