Another very busy week has seen consultation (of sorts) on the Government’s response to the Multiflex decision. You will recall that the case involved the payment of a GST refund when the ATO suspected that tax invoices were fraudulent. The Full Court of the Federal Court concluded that the law did not provide the ATO with power to withhold the payment of a running balance account surplus.
The Government has proposed an amending provision to the Taxation Administration Act that goes much further than GST input tax credit refunds. All running balance account surpluses would be able to be retained by the Commissioner if he is of the view that a return or a Business Activity Statement requires verification. The refund may be retained for up to 75 days without challenge.
Only five working days were allocated to the consultation period for this proposed change, which is clearly of profound importance to the rights of taxpayers. This timeframe is manifestly inadequate and has denied the broader community and industry the opportunity to consider and consult on the changes. The rushed timeframe is not consistent with Treasury’s recent commitments to improved consultation frameworks following the recent Strategic Review of the Department.
Retention of a refund to which a taxpayer is entitled can have irreversible impacts on a business. The proposed provision is fundamentally flawed in the breadth of the power it confers upon the Commissioner. You can access our complete submission here, and as always, I am interested in your thoughts.
Please see below for details of other activities this week.
Robert Jeremenko FTIA