House of Representatives

Explanatory Memorandum

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

Amendments to the Taxation Administration Act 1953

Method of payment of taxation and child support liabilities

Summary of proposed amendments

Purpose of amendment: This Bill will insert a provision into the Taxation Administration Act 1953 (the Act) to permit the making of Regulations under that Act in relation to the payment of taxation and child support liabilities. These Regulations will enable taxpayers to pay their taxation and child support liabilities through the recently introduced BILLPAY and Electronic Funds Transfer systems.

Date of Effect: The amendments will take effect from the date on which the amending Act receives Royal Assent.

Background to the legislation

The Australian Taxation Office recently introduced, as part of its Modernisation Program, the Agency Billpay Service (BILLPAY) and the Electronic Funds Transfer (EFT) systems.

BILLPAY will enable taxpayers to pay their taxation debts and other levies and charges administered by the Commissioner of Taxation, as well as any child support liabilities, through any Australia Post branch in the Commonwealth of Australia. EFT will enable taxpayers to pay these debts and charges etc. by using the "Direct Entry" system made available by Australian financial institutions.

Existing Regulations, made under a number of taxation laws, provide for payment to the Commissioner of Taxation and a very limited range of Commonwealth agents.

The introduction of BILLPAY and EFT, as well as making payment more convenient, will provide the opportunity to simplify the relevant laws by inserting one set of Regulations that deal with all payment arrangements into the Taxation Administration Regulations. To achieve this objective the Principal Act is to be amended to authorise the making of Regulations which will set out the payment arrangements for all taxation, levy, charge and child support liabilities.

Explanation of proposed amendments

The proposed amendment will enable Regulations to be made under new section 16A of the Act. These Regulations will apply to any liability that arises under any Act, or any Regulation, that is administered by the Commissioner of Taxation.

The liabilities to be covered by these Regulations will include taxation debts, levies, charges and child support debts [Clause 117 - new subsection 16A(1)].

The amendment will enable Regulations to be made under the Act which will provide for the methods by which these debts may be paid [Clause 117 - new subsection 16A(2)].

In addition, the amendment will allow Regulations to be made that will provide for the making of payments under BILLPAY and EFT and the use of credit and debit cards [Clause 117 - new subsection 16A(3)].

Amendments relating to taxation offences

Summary of proposed amendments

Purpose of amendment: To make technical amendments and correct an inconsistency in the Act in relation to penalties for taxation offences.

Date of Effect: Date of Royal Assent of the amending Act

Background to the legislation

Part III of the Act contains the provisions relating to prosecutions and offences.

The four amendments proposed to Part III in this Bill are intended to correct inconsistencies in those provisions and formalise a 1990 amendment to the Act, which was made with other amendments to the Crimes Act 1914 (the Crimes Act), concerning the time at which a prosecution may commence.

Explanation of proposed amendments

Court may order payment of amount in addition to penalty

Section 8W currently contains a penalty regime for persons convicted of an offence for making (section 8K), recklessly making (section 8N) or knowingly making (section 8P) false or misleading statements.

The current regime does not provide for penalties in respect of convictions for offences under sections 8C (failure to comply with taxation law requirements), 8D (failure to answer questions when attending before the Commissioner) and 8H (failure to comply with an order to comply).

The first amendment proposed [Clause 117] will insert a new section into the Act [New section 8HA] to provide penalties for persons convicted under sections 8C, 8D or 8H. New section 8HA is similar to section 8W but refers to convictions for offences under sections 8C, 8D and 8H.

Proposed new subsection 8HA(2) is similar in operation to new subsection 8W(3) and provides that a matter dealt with under section 19B of the Crimes Act, which is explained below, will be treated as a conviction for penalty purposes.

Under section 19B of the Crimes Act, a court does not necessarily have to record a conviction where an offence has been proven. For example, a court making an order, commonly referred to as a good behaviour bond, has the effect of discharging the defendant without proceeding to a conviction.

This means that despite the fact that the offence with which the person was charged has been proved, no conviction will be recorded against the defendant and the person will be released without conviction.

The operation of section 19B of the Crimes Act is currently recognised in subsections 8B(4) and 8J(5) of the Act. Those subsections provide that, for specific purposes in the Act, a reference to the conviction of a person includes a reference to an order made under section 19B of the Crimes Act.

The second amendment proposed [Clause 119] will amend section 8W of the Act to ensure that a matter dealt with under section 19B of the Crimes Act 1914 will be treated as a conviction for penalty purposes [New subsection 8W(3)].

Prosecution of taxation offences

A person charged with several offences against sections 8T (keeping incorrect records with intent to deceive or mislead) or 8U (falsifying or concealing the identity or location of a person with intent to deceive or mislead) is guilty of an offence.

These offences will generally be dealt with together and will be summary offences when the proceedings commence. When the person is convicted of one of the summary offences, the other offences become second or subsequent offences and therefore indictable offences by the operation of these provisions. This is the case even when the offences are heard in the same sittings in the same court.

The third amendment [Clause 120] proposed will prevent a second summary offence becoming an indictable offence where a person is convicted of the first summary offence before the same court in the same sitting. [New subsections 8ZA(5) to (7)]

The fourth amendment [Clause 121] proposes to formalise an amendment to subsection 8ZB(2) of the Act which currently refers to section 21 of the Crimes Act. The reference to section 21 should be a reference to section 15B. The correct reference was achieved through subsection 35(3) of Act No.4 of 1990 which amended the Crimes Act. However, that amendment was not formally made to the Act. This amendment formalises the position.