David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

Thank you very much, Madam Deputy Speaker. I take the opportunity to thank those members who have contributed to this debate: the member for Casey and the member for Blair. The member for Blair, of course, is one of the great contributors to these amendments to the tax law and a very avid contributor to matters relating to taxation.

The Indirect Tax Laws Amendment (Assessment) Bill 2012 establishes a system of self-assessment for the administration of the indirect tax laws as well as making other changes to the indirect tax laws. The amendments in this bill draw together a number of improvements to the tax laws that have been contemplated by governments for almost 20 years. These include furthering the tax laws improvement project of 1995 and introducing greater standardisation across the administration regimes for different taxes through the adoption of the tax code conventions.

Schedule 1 will simplify the tax system by allowing taxpayers to self-assess their indirect tax liabilities and entitlements for the GST, luxury car tax, wine equalisation tax and fuel tax credits. It will implement recommendations arising from the Board of Taxation's 2008 review of the legal framework for the administration of the goods and services tax. The schedule harmonises the self-actuating system of GST, luxury car tax, wine equalisation tax and fuel tax credits with the self-assessment system of income tax by adopting well-established principals from the income tax self-assessment system where appropriate, with some modifications to allow for the special features of indirect taxes. The provisions use tax code conventions and are drafted generically so they can be applied across all taxes. Under the current self-actuating system, taxpayers are automatically liable for indirect tax liabilities or entitlements based on the liabilities and entitlements attributable to a tax period. Under the new assessment regime, taxpayers will only be liable to pay or be entitled to a refund of the amount stated in their assessment. Taxpayers can continue to report their indirect tax liabilities and entitlements in the same manner as they currently do. In most cases lodgement of a Business Activity Statement will trigger a self assessment. The commissioner will be taken to have made an assessment and the Business Activity Statement will be treated as a notice of assessment. Taxpayers who are required who are required to lodge a Business Activity Statement will continue to do so on the same due dates and will be required to pay their liabilities on the same day.

Consistent with the income tax assessment regime the commissioner may amend an assessment within a four-year period of review. Likewise taxpayers may apply for an amendment within that same four-year period. An assessment may only be amended outside the period of review in certain circumstance. An amendment in the period of review will give rise to a refreshed period of review of four years in relation to the particular that was amended.

To minimise the administrative and compliance costs for both taxpayers and the commissioner, some features of the existing regime have been preserved and where necessary existing administrative practices have been legislated. These changes to the administrative framework for indirect taxes will formalise the administration process for the indirect tax laws and help reduce the complexities associated with having different administrative regimes for indirect and income taxes. Greater standardisation between the administration regimes of the two taxes will result in lower compliance costs for taxpayers. It will also decrease the need for advisers and administrators to have specialist knowledge of the multiple tax administration provisions. The majority of the amendments in schedule commence on 1 July 2012. The amendments, which remove provisions no longer applicable following the introduction of the new assessment regime, commence on 1 January 2017.

Schedule 2 legislates the commissioner's power to make a determination to allow a taxpayer to take into account on his or her return for the current tax period minor errors made on certain returns for preceding tax periods. The amendments contained in this schedule ensure that the commissioner may, in a self-assessment system, continue to allow taxpayers to correct mistakes in a current tax period rather than needing to amend an earlier assessment.

Schedule 3 confirms that that luxury car tax and wine equalisation tax are part of the calculation of the net amount under the GST act. The luxury car tax and wine equalisation tax acts already provide that payments and refunds of amounts under these acts are to be added to or subtracted from the net amount calculated under the GST act. However these amounts are not specifically identified in the definition of net amount in the GST act. There will be no practical changes. Both taxpayers and the commissioner have treated these amounts as part of the net amount in accordance with the luxury car tax and wine equalisation tax acts.

Schedule 4 corrects technical or drafting defects, removes anomalies and addresses unintended outcomes to ensure that the taxation law operates as intended. This is part of the governments ongoing commitment to the care and maintenance of the tax system and I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.

See this speech in context