20 May 10 Improvements to taxation Running Balance Accounts and interest on overpayments
In media release No 2010/112, issued 20 May 2010, the Assistant Treasurer, Senator Nick Sherry,announced the Rudd Government would rewrite the tax law's running balance account provisions to provide the flexibility to manage tax debts and entitlements more efficiently and in a way that is more useful for taxpayers.
The running balance account system, enacted in 1999, was originally intended to provide taxpayers with a single tax account statement that covered all their tax debts, like a credit card statement.
However the current system has not achieved its original goal, partly due to limitations in the running balance account provisions. For instance, the system prevents certain debts such as general interest charge being brought into the running balance system and limits the ATO's ability to manage running balance accounts to meet specific taxpayer preferences.
In addition to the rewrite, the proposal will also provide for:
- all debts and entitlements arising in relation to tax laws the ATO administers to be accounted for through the running balance account; and
- a better result by ensuring greater flexibility in how running balance accounts are managed.
The Assistant Treasurer also released a discussion paper seeking the public's views on how best to streamline and improve the operation of those provisions.
The consultation period closes on 8 August 2010.