Australian Financial Review http://www.afr.com.au/content/990702/news/news10.html July 2, 1999 Accountants concerned at provisions for change in GST legislation By Brett Clegg The accounting profession has sounded a warning on provisions within the GST legislation that would allow for changes to the operation of the tax through regulations rather than new legislation. Institute of Chartered Accountants taxation director Mr Ian Langford-Brown said that while safeguards concerning changes to the actual rate of GST have been clearly defined, measures contained in both the central legislation and transitional procedures provide for broad powers in other areas. "This power is a recipe for unfairness and uncertainty," he said. "In effect it means that [the bureaucracy] could rewrite the GST legislation and have the new law assented to by the Governor-General without any scrutiny at all from Parliament, let alone taxpayers." The situation also raises the perennial fear held by accountants and the business community concerning the powers of the Tax Commissioner. Some worry the provisions will result in the Tax Office having wide powers of discretion that might result in it effectively making the law. Greenwood and Freehills tax partner Ms Annamaria Carey said many aspects of the operation of the GST were not set out in the legislation passed by Parliament but were to come through regulations driven by the ATO. "There is not the same scrutiny upon regulations drafted by the ATO as with legislation that is passed by Parliament," she said. "It runs the risk of changes being rubberstamped without an adequate level of quality control or focus upon the issues involved." Two issues not clarified in the legislation but to be dealt with through regulation include grouping provisions and the partial input tax credit for financial institutions. Grouping provisions, which mandate that related companies must lodge a single GST return, have been extended to partnerships and trusts but the actual rules for determining what noncompanies need to do so are yet to be released. Financial institutions also face uncertainty, with the rate for partial input tax credits on financial supplies, as well as what supplies qualify for the credit, not contained within the GST bill. c This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited. ************************************************************************* This posting is provided to the individual members of this group without permission from the copyright owner for purposes of criticism, comment, scholarship and research under the "fair use" provisions of the Federal copyright laws and it may not be distributed further without permission of the copyright owner, except for "fair use." -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
