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Wednesday, 18 March 1987
Page: 876


Senator WATSON(12.41) —The Senate is debating the Taxation Laws Amendment Bill (No. 5) 1986. It deals with three principal changes to the Income Tax Assessment Act. The first change affects the provisional tax aspects of income tax so that, instead of paying provisional tax once per year, a large number of taxpayers will in future be required to pay by four equal instalments. The second change relates to the assessability of capital gains and deductibility of capital losses from foreign exchange transactions. The third change relates to short term redeemable preference shares involved with short term share based financing arrangements.

The first of these changes amends section 221ya dealing with provisional tax. In so doing, it details in an extraordinarily complex manner the treatment of provisional tax. I would even go so far as to say that it is perhaps one of the most complex pieces of legislation put before the Senate in the taxation field for quite a number of years. In addition to the traditional definition of provisional tax, we now have four new aspects of provisional tax. We have what is known and defined in the amendment as applicable provisional tax. That is in addition to ordinary provisional tax. We also have basic provisional tax and, thirdly, varied provisional tax.

Interpretation of this Bill will be particularly difficult for the layman due to the excessive intricacy of the document. Ordinary taxpayers will be forced more and more to go to their lawyers and accountants to determine their liabilities and responsibilities for income tax. So, despite pleas by most members of this chamber for our tax laws to be simplified, the Government is hell-bent on making the tax law more complicated rather than on simplifying it. The complexities arise even before the reader has negotiated the interpretative sections. For example, we are served up, in clause 14 (a), with the following definition:

`varied provisional tax amount', as at a particular date in relation to a year of income, means the amount determined (or last determined, as the case requires) before that date, in accordance with section 221yda (as affected by any reduction under section 221ydc or any alteration under section 221yg).

Who could basically follow that, unless he is a lawyer? How can a small businessman hope to cope with legislation containing these sorts of technical definitions? The purpose of this inordinately complex piece of legislation is to bring forward the payment of provisional tax.

Sitting suspended from 12.45 to 2 p.m.