The Tax Institute welcomes the opportunity to make a submission to the Senate Legal and Constitutional Affairs Committee (the Committee) in relation to its inquiry titled The performance and integrity of Australia's administrative review system and the associated Terms of Reference (the Inquiry).
Terms of reference for the inquiry are broad and encompass many important aspects of Australia's administrative review system. We have focused our comments primarily on the operation of the Administrative Appeals Tribunal (The AAT), given the importance of the AAT in the resolution of tax disputes.
The AAT plays a crucial role in the review and administration of Australia's tax system. The AAT's review of decisions and outcomes allow applicants the opportunity to have adverse decisions reviewed by a trusted and wholly independent tribunal. This ensures that the authority given to administrative bodies is regulated and exercised in a consistent and lawful manner with the appropriate oversight. The AAT also acts as an important pathway for resolving disputes, significantly reducing the number of tax cases escalating to litigation in the court system.
As a result, it is imperative that the AAT is supported to ensure that it operates in an equitable and efficient manner. To achieve this, the AAT needs to be appropriately funded and resourced to handle cases in an impartial and expedient manner. Further, steps should be taken to increase transparency and accountability over AAT matters, while ensuring the AAT is a low cost and informal environment that encourages taxpayers seek a review of adverse decisions. We are also of the view that the Administrative Review Council (ARC) should be re-instated.