Consultation on the Application of Consistent Self Assessment Principles

On 27 March 2007 the then Minister for Revenue and Assistant Treasurer announced that he had asked the Board of Taxation to consult publicly on the scope to apply consistent self assessment principles across all federally administered taxes (including the goods and services tax).

On 11 June 2008 the Assistant Treasurer announced in a Press Release that the Board would undertake a review of the legal framework of the GST, which replaces this Review. The Board's findings on the GST may then inform any consideration of the application of the self-assessment principles to other taxes. Further information is available on the GST Administration Review page.

Terms of Reference

The Board of Taxation (the Board) should consult with relevant stakeholders and report to the Minister on the merits of the following possible improvements to the taxation system:

• Extending the framework for legally binding rulings that currently applies to income tax and numerous other taxes to the GST and other taxes for which the Commissioner of Taxation has administrative responsibility.  The goal of a single regime for rulings is considered worth pursuing for the potential benefits for practitioners and taxpayers who interact with several aspects of the tax system;
• Applying the principle that amendment periods should approach the minimum required for the Tax Office to identify incorrect assessments and take action to correct them.  Recent changes to income tax legislation reduced amendment periods for individuals and small businesses to two years. 
• Applying the Shortfall Interest Charge, rather than the General Interest Charge, to cases where there is a shortfall of tax (in taxes other than income tax).

In pursuing the reference in relation to rulings, the Board should consider:

• Whether the nature of any indirect taxes (for example, the two party impact of transaction taxes such as the GST) might require the rulings regime for these taxes to differ from the new income tax rulings regime;
• The appropriate way to rule in relation to past transactions for indirect tax where tax has been passed on to final consumers;
• Whether the relationship between excise and customs duties raises any specific issues in the implementation of a rulings regime.

In pursuing the reference in relation to amendment periods, the Board should consider the implications of the potential for a lack of symmetry between taxpayers who are a) parties to the one transaction in the GST system, or b) pay customs duty.

The Board appointed a Working Group of its members comprising Eric Mayne (Chairman), Chris Jordan and Curt Rendall to oversee the Board’s consultations, however the Working Group members are currently focusing on the review of the legal framework for the administration of the Goods and Services Tax as discussed above.

The Treasurer’s Press Release announcing the Board’s review is available from the Treasurer’s website.

Further information on this review can be obtained from Anne Millward (02 6363 4363) or Vernon Joice (02 6263 4369) at the Board of Taxation Secretariat.