Commonwealth Tax Commissioner Gives Evidence In Petroulias Trial

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

07 December 2001

The Australian Tax Commissioner, Michael Carmody, has this week been giving evidence in the trial of former First Assistant Tax Commissioner Nick Petroulias, who is alleged to have devised tax minimisation schemes which conflicted directly with his senior role within the ATO.

Mr Carmody admitted that he was 'surprised' when he discovered that his assistant was issuing private tax rulings, and believed that the Strategic Intelligence Unit (of which Mr Petroulias was the newly appointed head) should have concentrated on stamping out illegal tax avoidance schemes and left the business of tax rulings to the Tax Council Network, but told the court that he had never forbidden such activities.

'I do not recall ever saying to him that it was not his role to issue rulings,' Mr Carmody explained. 'It was not my intention that the SIA would be in the business of issuing rulings, but I did not say anything to him.'

The Former Assistant Tax Commissioner stands accused of being less than open-handed in his private rulings, deeming some tax minimisation schemes 'baddies', but making favourable rulings on some cases in order that the company in which he had a share would profit. He is said to have received around $200,000 in this way.

However, in November, a former employee in Petroulias' department, Emmanuel Aivaliotes, told the court that the atmosphere in the Australian Taxation Office prior to the departure of his boss was 'poisonous', and said that there was a 'witch hunt' mounted by some parties to discredit Mr Petroulias.

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