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Retention of the Private Binding Ruling register - A win for transparency

Publication date: 03 Mar 09 | Source: THE TAX INSTITUTE

Australia’s premier professional tax body, the Taxation Institute of Australia, welcomes the decision by the Commissioner of Taxation that the Private Binding Ruling (PBR) register will be retained.

President of the Taxation Institute, Joan Roberts, applauded the decision noting that this is a sensible outcome that recognises the importance of the PBR register in providing the necessary checks and balances in taxation administration through greater transparency and consistency in the application of taxation laws.

The register of publish edited versions of written binding advice issued by the Taxation Office (ATO) was introduced in a response to concerns about the operation of the Private Ruling System, in particular about transparency and consistency of ATO advice. It was a key recommendation of an Inquiry conducted on behalf of the ATO by Tom Sherman (Report of an Internal Review of the systems and procedures relating to Private Binding Rulings and Advanced Opinions in the Australian Taxation Office) handed down on 7 August 2000.

The ATO had advised in November 2008 that it was proposing to close down public access to the content of the rulings listed on the register as it was costly, not widely used, was never intended to be used as a research tool or guidance to taxpayers, and given the likelihood of aged views on the register, the existence of the Register in its present form posed an unacceptable level of risk to users.

“Whilst blind reliance on the register could carry great risk, if used with the appropriate care it is also a important tool that supplements the ATO’s formal precedent data base by providing indicative views of the ATO’s approach in over 80,000 factual situations” said Ms Roberts. “It, like similar registers in the United Kingdom and the United States, has evolved into an important tool for practitioners”

The Taxation Institute also welcomed the Commissioner’s decision to refer the administration of the private binding rulings system to the Inspector-General of Taxation for possible inclusion on the Inspector General’s forward work program.

“The outcome also reflects the value of the open consultation that has occurred over the last three months on this issue” she said. It is only with open exchanges of views that the tax system can reasonably meet its revenue goals while containing the compliance costs imposed on the community” concluded Ms Roberts.

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Media Contacts:

Joan Roberts, President - Taxation Institute of Australia on 0419 308 141
Dr Michael Dirkis, Senior Tax Counsel - Taxation Institute of Australia on 0417 400 349