Senate

Revised Explanatory Memorandum

(Circulated by authority of the Hon Kelly O'Dwyer MP, Minister for Revenue and Financial Services, Minister for Women, Minister Assisting the Prime Minister for the Public Service)

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Third party reporting

2.38 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

2.39 Schedule 2 to this Bill amends Schedule 1 to the TAA 1953 to require that entities that provide courier or cleaning services to report to the ATO details of transactions that involve engaging other entities to undertake those courier or cleaning services for them.

Human rights implications

2.40 The amendments made by this Schedule engage the prohibition on arbitrary or unlawful interference with privacy contained in Article 17 of the International Covenant on Civil and Political Rights, as entities that provide a courier or cleaning service will need to provide a range of personal information to the ATO that they collect in the ordinary course of business.

2.41 These reporting obligations are compatible with the prohibition, as they are neither arbitrary nor unlawful. In addition, they are aimed at a legitimate objective of ensuring that entities in the courier or cleaning industries comply with their taxation liabilities and are an effective and proportionate means of achieving that objective by requiring only the minimum amount of information necessary to identify relevant taxpayers and transactions.

2.42 The United Nations Human Rights Committee has stated, in their General Comment No. 16, that:

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'unlawful means that no interference can take place except in cases envisaged by the law. Interference authorized by States can only take place on the basis of law, which must itself comply with the provisions, aims and objectives of the Covenant [the ICCPR]'; and

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'the concept of arbitrariness is intended to guarantee that even interference provided for by law should be in accordance with the provisions, aims and objectives of the Covenant and should be, in any event, reasonable in the particular circumstances'. ^[1]

2.43 The objective of requiring reporting by entities that provide a courier or cleaner service is to improve overall taxpayer compliance in the courier and cleaning industry by gathering information regarding their potential tax-related liabilities from entities that can provide it to the Commissioner without significant regulatory burden.

2.44 Legislative reporting regimes, such as third party reporting, provide more certainty and consistency of treatment for entities than the alternative, where the Commissioner collects information under his or her general information gathering powers on an ad-hoc basis. The information to be reported by entities under third party reporting is typically limited to that information they already hold that has been collected in the ordinary course of their business. Taxpayer information held by the ATO is subject to strict confidentiality rules that prohibit tax officials from making records or disclosing this information unless a specific legislative exemption applies.

2.45 The amendments allow the Commissioner to exempt entities from reporting where, for example, the Commissioner does not expect to be able to productively use the information or where reporting the information places a disproportionately high compliance cost on the third party relative to the benefit of providing the information to the ATO.

Conclusion

2.46 This Bill is consistent with Article 17 of the International Covenant on Civil and Political Rights on the basis that its engagement of the right to privacy will neither be unlawful nor arbitrary. To this extent, the Bill complies with the provisions, aims and objectives of the International Covenant on Civil and Political Rights.