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Greater accountability needed for ATO.



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Media Release

 

CORPORATE TAX ASSOCIATION

of Australia Incorporated

 

GREATER ACCOUNTABILITY NEEDED FOR ATO

 

Recent events have further underscored the need for an urgent shake up of the ATO structure and administration”, according to Mr. Frank Drenth, the Incoming Executive Director of the Corporate Tax Association.

 

“An important first step could be the establishment of a Board of Directors to ensure that the ATO is made more accountable. Boards of this type are presently being established both in the US and Canada and there is a need for a similar body in Australia which could be included as part of any Tax Reform package”, he said.

 

Mr. Drenth comes to the CTA with 30 years experience in the tax field including work at the ATO, Ernst and Young and as a tax specialist within the mining industry at both Santos and Rio Tinto. He replaces Mr. Bob Bryant who is stepping down from the CTA after 8 years to pursue other interests.

 

Mr. Drenth points to the recent tax case, Bellinz v FCT , involving a major financing at Loy Yang Power Station, as highlighting a range of persistent problems, including:

 

* the confusion and inequity arising from the Commissioner reneging on past practice - in this case, denying depreciation deductions in a commercial hire purchase arr angement;

 

* how the imprecise drafting of some Tax Rulings may have undermined the whole system of binding Public Rulings, essential to our system of self-assessment; and

 

* the Commissioner’s current tendency to label some of the most commercial of arran gements as “tax avoidance” purely on the basis of revenue considerations.

 

According to Mr. Drenth, this case is only the latest in a series of systemic problems which he believes is, ultimately, putting major commercial projects at risk by undermining the confidence of local and international investors in the proper, fair and predictable administration of the tax Jaws.

 

“Taxpayers”, he said, “are also increasingly disillusioned with the ATO’s handling of private tax rulings, as in the Bellinz case, its role in the development and drafting of complex and unworkable legislation, such as the recent ‘dividend streaming’ rules and changes to the taxation of company distributions, and its failure, over a prolonged period, to deal with specific corporate concerns over such issues as anomalies with the transfer of group losses and the clarification of very difficult CGT company shareholder tracing rules”.

 

“A Board of Directors would better ensure that such problems are dealt with in a more equitable, objective and efficient manner”, said Mr. Drenth.

 

Contact: 

 

Mr. Frank Drenth, Executive Director 

Corporate Tax Association 

Level 11/455 Bourke Street 

MELBOURNE VIC 3000

 

Ph: (03) 9600 4411

Fax: (03) 9600 4055

Mobile: 0412 444 975

 

28 APRIL 1998