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Tensions in tax decision-making: The decision to not collect tax


The Commissioner of Taxation is vested with the power to assess tax, and with the power to collect tax which is due and owing. However, the Commissioner and the responsible Minister also have a statutory power to not collect tax, thus creating an inherent tension in the administrative decision making process.

This paper outlines the statutory sources of power, judicial precedent, and administrative guidance relating to the decision to not collect tax. While the decision to not collect tax has a threshold test of taxpayer hardship, the hardship test is a necessary but not sufficient condition, and if hardship is established the decision-maker then has a discretion as to whether or not to provide relief from the liability to pay tax.

The paper argues that tensions in this decision process arise in relation to both the decision-maker, and the considerations in exercising the administrative discretion to not collect tax. In relation to the former, the paper questions whether it is appropriate to have the power to collect, and the power to not collect, vested with the same decision-maker. The paper further argues, in relation to the considerations in exercising the discretionary power, that the discretion should not be unfettered, but the factors for consideration should be limited.

Author profile

Assoc Prof Rodney Fisher
Rodney is Associate Professor in the Faculty of Law, University of Technology Sydney. He is also a member of Adjunct Faculty at Atax, UNSW, lecturing in postgraduate CBD classes. Rodney has published widely in both academic and professional journals on a range of tax issues, and has presented both in Australia and overseas, addressing a range of both current tax technical issues and legal/policy matters. - Current at 14 December 2012
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