Proposals to give the ATO the ‘Statutory Remedial Power’ to alter the application of superannuation and tax laws has received support from the Australian Institute of Superannuation Trustees (AIST), provided there are appropriate safeguards.
The last Federal Budget included an announcement of new powers for the ATO Commissioner to modify the outcomes of tax and superannuation legislation. Late in 2015 the Treasury released draft legislation.
“AIST supports the intent of the proposed legislation, and believes it will smooth the administration of superannuation and taxation law, particularly in relation to non-contentious technical issues. In this way, the legislation can be seen as a means of cutting red-tape, contributing to the government’s target for red tape reduction, and supporting the private sector.”
However AIST does warn that Parliament granting officials the power to change the application of legislation “needs to come with appropriate checks and balances.”
“Most importantly, there is a need to ensure accountability, transparency and consistent application of the power.”
AIST notes that “the proposed remedial power can only be used where it has a beneficial outcome for affected taxpayers, and where the exercise of power is not inconsistent with the purpose or object of the law. It can not result in a less favourable result.”
“We further note and support the each of the safeguards built into existing and proposed legislation. Without these safeguards, there would be greater accountability and transparency problems with the measures.”
“In particular, it is important that the proposed power is used as means of last resort, when it is clear that unintended consequences can not be ameliorated in any other way. It should not, for example, be used as a short-cut to tidy up outdated record-keeping requirements imposed on taxpayers (such as references to technology or mediums that may no longer be available).”
Though AIST does support strengthening the reporting requirements, saying the ATO should be required to publicly report, at least annually, on the use of the new power.
“This reporting should provide reasonable details of the circumstances involved in each case, justification for use of the power and an explanation of the beneficial outcome for affected taxpayers. These reporting requirements should be built into legislation.”
The Treasury has conducted a consultation process on draft legislation to implement the measure, though the submissions have yet to be publicly released. The legislation is likely to go before the Parliament in the Autumn sitting, which starts the 2nd of February.
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