Published on 01 Jul 12
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The term “sovereign risk” originally referred to the risk that a government might default on its debt or loan obligations. More recently, the term has come to have a wider meaning and, typically in this wider context, it involves changing the rules in the middle of the game so that people who have made investment decisions and structured their enterprise on the basis of the assurances as to what the government will do find that those assurances have proven valueless. In the author’s view, Australian taxation policy unfortunately now exhibits many features of this broader concept of sovereign risk.
Among these are taxes imposed contrary to specific undertakings, retrospective legislation, unknown legislative rules, inappropriate considerations being taken into account in legislative policy, and the changed treatment of existing long-term investments. Recent developments in each of these aspects of taxation governance are considered in turn in this article.
David Russell CTA-Life
David commenced legal
practice in 1974. He is admitted to practise in Australia, England and
Wales (Lincoln’s Inn), the Courts of the Dubai International Financial
Centre, New York (as a Legal Consultant), New Zealand and Papua
New Guinea. He was appointed Queen’s Counsel in 1986. David
has acted for Commonwealth and State Governments as well as
individuals and corporations and was the President of The Tax
Institute from 1993 to 1995. Current at 01 October 2014
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