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Tuesday, 19 February 1980
Page: 81

Mr Jacobi asked the Treasurer, upon notice, on 6 June 1979:

(1)   Does the Australian Taxation Office examine tax avoidance schemes advertised in the media; if so, how many staff are involved in the examination of these schemes.

(2)   Has the Taxation Office examined each of the 70 ways to reduce tax which have been mentioned in full-page advertisements for The Small Business Letter in the Australian of 7 March 1 979 and in many issues of the National Times; if not, why not; if so which of these schemes are considered to be measures for legitimate tax minimisation and which are considered to be measures for blatant tax avoidance.

(3)   Do any of these schemes wipe out income tax, make a salary rise tax free, avoid Division 7 tax and eliminate company tax as claimed in the advertisements.

(4)   What action will the Government take to close any blatant evasion through any of these 70 schemes.

(5)   Has the Taxation Office examined schemes advertised in many recent issues of the National Times under the heading 'TOTAL TAX WIPE-OUT for Trusts, Self Employeds, Salaried Employees, Companies, Partnerships' by Harry Walsh Tax Scheme Brokers; if not, why not; if so, are any of the schemes offered by this broker considered to be measures to blatantly evade tax.

(6)   Do any schemes publicly offered by this broker in fact provide a total tax wipeout; if so, what action will the Government take to close the schemes; if not, are these advertisements misleading and will he or his colleague take any action on this matter.

(7)   Have the latest Q.C.'s opinions referred to in these advertisements been examined by the Taxation Office; if not, why not; if so, do any of these opinions provide scope for further tax evasion.

Mr Howard -The answer to the honourable member's question is as follows:

(   1 ) The Commissioner of Taxation has informed me that his officers regularly examine tax avoidance schemes advertised in the media. Officers are not employed exclusively on this work and the examinations are carried out as part of general investigatory duties.

(2)   The Taxation Office is aware of the broad framework of schemes referred to in 77ie Small Business Letter. Some are well known exercises in acceptable tax planning but blatant forms of tax avoidance, or even evasion, form the majority.

(3)   and (4) The Commissioner does not concede that the blatant tax avoidance schemes are effective. He has stated that he will be contesting the efficacy of the arrangements before the Courts or Taxation Boards of Review. As soon as the details of a new scheme are ascertained and there is doubt that the law, as it is at present enacted, is adequate to deal with it, steps are being taken to introduce specific measures to deal with the scheme. In addition, I have announced that section 260 of the Income Tax Assessment Act, the general anti-avoidance provision, is being revised.

(5)   Schemes advertised under the heading TOTAL TAX WIPE-OUT are blatant attempts to avoid tax.

(6)   It is up to people who are attracted by the advertisements to decide whether or not they are misleading. See also answers to parts (3) and (4).

(7)   Taxation officers examine opinions given by Queen's Counsel in relation to tax avoidance schemes if and when they can be obtained. The opinions generally relate to the likely taxation implications of specific schemes and are not designed to provide scope for alternative methods of avoidance.

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