The ATO Commissioner has been given the power to modify the operation of tax and superannuation laws, with the passage of the Tax and Superannuation Laws Amendment (2016 Measures No. 2) Bill 2016 through both houses of Parliament.
Minister for Revenue and Financial Services, Kelly O’Dwyer, said the passage of the Bill demonstrates the Government’s “commitment to improving the flexibility, fairness and sustainability of the tax system”.
Minister O’Dwyer said the 2016 Measures No. 2 Bill “establishes a Remedial Power for the Commissioner of Taxation, to allow for a more timely resolution of certain unforeseen or unintended outcomes in the taxation and superannuation laws”.
The Explanatory Memorandum to the Bill says this power is to ” allow for a more timely resolution of certain unforeseen or unintended outcomes in the taxation and superannuation laws.”
“The power allows the Commissioner to make, by disallowable legislative instrument, one or more modifications to the operation of a taxation law to ensure the law can be administered to achieve its intended purpose or object.”
However there are a number of conditions that must be met in order for this power to be validly exercise, including that the modification is not inconsistent with the intended purpose of the provision, the Treasury or Department of Finance have advised the Commissioner the budgetary impact would be negligible and the Commissioner is satisfied that “appropriate and reasonably practicable” consultation has been undertaken.
Additionally an “entity (the first entity) must treat a modification made under the power as not applying to it and any other entity if the modification would produce a less favourable result for
the first entity”.