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Thursday, 12 December 2002
Page: 7904

Senator HARRIS (2:51 PM) —My question is directed to the Minister for Revenue and Assistant Treasurer. Minister, is it true that the taxpayers charter guarantees that taxpayers will be treated as individuals by the ATO? Is it true that tax ruling 92/20 issued by the Commissioner for Taxation states that a tax ruling is binding on the commissioner to the extent that it is favourable to the taxpayer? Is it true that the commissioner failed to take into account tax ruling 94/4, which requires a consideration of four criteria specific to an individual before applying penalties to a cooperative project, and that he continued to fail to do so when threatening to continue to apply penalties to any one of the investors who did not offer to settle?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Harris, who does at least try to assist his constituents. The taxpayers charter states that the Australian Taxation Office is committed to treating individuals fairly and reasonably by making both reasonable and consistent decisions in accordance with the law. The taxpayers charter also guarantees that people's individual circumstances will be taken into account. However, treating people as individuals does not mean that the law is applied differently to different people when the circumstances are the same. It is true that a tax ruling is binding on the commissioner. However, it does not follow that the commissioner failed to take into account the tax ruling mentioned by Senator Harris in imposing penalties on taxpayers who declined to settle.

The chapter and verse about how penalties were calculated for scheme investors is obviously a matter for the commissioner, as Senator Harris would know, the commissioner being an independent statutory agent responsible for administering the tax law. But I am advised that there is no reference in the tax ruling to four criteria specific to an individual. The income tax law imposes penalties automatically in certain situations but gives the commissioner the power to remit penalties. The commissioner advises me that he exercised that power for most scheme participants. Even participants who did not settle in most cases still had penalties remitted to 10 per cent. In making this decision the commissioner advised that he did refer to the relevant rulings.

I would also note that the scheme investors who chose to settle had penalties remitted to zero and were able to enter into arrangements giving them two years interest free in which to pay. In these circumstances, the commissioner does have to walk a fine line between fairness to investors who are caught in circumstances which they may not have fully understood and the interests of the wider community in ensuring that people meet their tax obligations when they are found to be liable to pay tax. The specific detail of the ruling is a matter of some technicality but in making those comments to Senator Harris I believe I have basically addressed his question.

Senator HARRIS —Mr President, I ask a supplementary question. Minister, would the failure by the commissioner to apply tax ruling 94/4 render void the amended assessments continuing to apply the penalties? Is it true that the ATO is still holding requests from MMTEI taxpayers under FOI relating to an AAT appeal up to 20 months after the FOI requests were received by the department? Would the minister give an undertaking to look into those specific FOI requests?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you for the supplementary question. The answer to the first part of the supplementary question is clearly no. The commissioner did not ignore the ruling. As I understand it, the next question you ask, Senator Harris, would not follow. I have already said that I have been advised that there are not four particular criteria to be applied to individual taxpayers. Nevertheless, the rulings do list factors which can be relevant in considering the level of penalties, and the commissioner takes those factors into account. I am not entirely sure what the last part of the question is getting at but I am advised that FOI issues between investors and the ATO have been largely resolved. I have checked that. If Senator Harris is talking about a particular case, I adhere to my normal policy of not commenting on individual cases in the Senate. Of course, if Senator Harris wishes to make a specific representation on behalf of a particular taxpayer I will refer the individual's circumstances to the commissioner. (Time expired)