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Creating certainty in GST is the key to successful implementation

Publication date: 16 Oct 98 | Source: THE TAX INSTITUTE

How to create certainty in the implementation and application of a GST for all Australian taxpayers was one of the major themes to emerge from the first Annual GST Symposium held by the Taxation Institute of Australia in Canberra this week.

"One of the key issues faced by the Government in introducing this fundamental change to the taxation system is how to create a mechanism that will deliver certainty in implementation of a GST and do so in a timely manner," said Mr Ken Fehily, Indirect Tax Partner at Arthur Andersen and Victorian State Councillor for the Taxation Institute of Australia.

"It takes months and even years to introduce new taxation laws let alone to communicate how these laws are to be applied to all taxpayers. Any change, particularly one as fundamental as this, will bring with it a period of uncertainty and this needs to be addressed," Mr Fehily said.

A proposal put forward by Ken Fehily to the GST Symposium, including Senator Brian Gibson, was for the introduction of a Council consisting of representatives of the Australian Tax Office, Government and industry, empowered to make a legally binding decision on issues regarding the GST status of a good or service – ie, is it taxed, zero-rated or exempted.

"This could work in problem areas such as health care or education where some goods and services may be taxed and some may not. The ‘Council’ would be empowered to make a decision within 30 days and then that decision would become law 30 days after publication or gazetting," he said.

"If taxpayers or the Government had concerns with the decision, they would have the right to seek consultation to question the decision, but until that issue was resolved, the decision of the Council would stand as law."

"This is a rather radical proposal to put what some might consider unfettered power into the hands of a ‘Council’, however, this type of mechanism would avert the situation where the ATO has 3000 applications for decision on the GST status of goods in the first month of the introduction of GST and no hope of dealing with these for some months, if not years," Mr Fehily said.

"This Council may only need to operate for a period of 2-3 years after the initial implementation of a GST to ensure issues are quickly resolved. It may then be dissolved and replaced by a different mechanism or system for resolution of GST issues."

"This proposal for a Council would provide both certainty and protection for taxpayers and industry trying to adapt and operate in the new taxation environment."} {

How to create certainty in the implementation and application of a GST for all Australian taxpayers was one of the major themes to emerge from the first Annual GST Symposium held by the Taxation Institute of Australia in Canberra this week.

"One of the key issues faced by the Government in introducing this fundamental change to the taxation system is how to create a mechanism that will deliver certainty in implementation of a GST and do so in a timely manner," said Mr Ken Fehily, Indirect Tax Partner at Arthur Andersen and Victorian State Councillor for the Taxation Institute of Australia.

"It takes months and even years to introduce new taxation laws let alone to communicate how these laws are to be applied to all taxpayers. Any change, particularly one as fundamental as this, will bring with it a period of uncertainty and this needs to be addressed," Mr Fehily said.

A proposal put forward by Ken Fehily to the GST Symposium, including Senator Brian Gibson, was for the introduction of a Council consisting of representatives of the Australian Tax Office, Government and industry, empowered to make a legally binding decision on issues regarding the GST status of a good or service - ie, is it taxed, zero-rated or exempted.

"This could work in problem areas such as health care or education where some goods and services may be taxed and some may not. The 'Council' would be empowered to make a decision within 30 days and then that decision would become law 30 days after publication or gazetting," he said.

"If taxpayers or the Government had concerns with the decision, they would have the right to seek consultation to question the decision, but until that issue was resolved, the decision of the Council would stand as law."

"This is a rather radical proposal to put what some might consider unfettered power into the hands of a 'Council', however, this type of mechanism would avert the situation where the ATO has 3000 applications for decision on the GST status of goods in the first month of the introduction of GST and no hope of dealing with these for some months, if not years," Mr Fehily said.

"This Council may only need to operate for a period of 2-3 years after the initial implementation of a GST to ensure issues are quickly resolved. It may then be dissolved and replaced by a different mechanism or system for resolution of GST issues."

"This proposal for a Council would provide both certainty and protection for taxpayers and industry trying to adapt and operate in the new taxation environment."