House of Representatives

Explanatory Memorandum - PART I

(Circulated by authority of the Treasurer, the Hon. John Howard, M.P.)

INCOME TAX ASSESSMENT AMENDMENT (ADDITIONAL TAX) BILL 1982

General outline

The Bill will amend the income tax law:

•

to increase the rate of additional tax payable for late payment of income tax and for underestimating instalments of company tax from 10 per cent per annum to 20 per cent per annum with effect from a date 2 months after the Bill becomes law;

•

to re-express the power given to the Commissioner of Taxation to remit late payment penalty, so that remission will only be permitted in special circumstances, such as adverse business or other factors beyond the control of the taxpayer - this more limited power of remission will mean that the existing administrative practice of the Commissioner of agreeing to remit late payment penalty on tax in genuine dispute, provided half the tax in dispute is paid, will not be available in future;

•

to preserve existing arrangements whereby the Commissioner has permitted an amount of disputed tax to remain unpaid, free of late payment penalty, pending resolution of an objection or appeal.

Part II of this explanatory memorandum - a clause by clause explanation of the Bills - is in course of preparation.