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From: [EMAIL PROTECTED] <[EMAIL PROTECTED]> To: Undisclosed. Recipients <[EMAIL PROTECTED]> Date: Tuesday, 29 June 1999 7:32 PM Subject: Legal Realities.doc Legal Realities "Taxation is now
optional" A QUESTION OF FAIRNESS The question of taxation concerns all businessmen worldwide. A fundamental feature of any consideration of taxation regimes is what are the lawful taxes a business can be expected to pay? In a number of countries there is an unlawful tax system as well with "contributions" being collected at the point of a gun and delivered to the warlord controlling the troops or bandits, but this approach is not acceptable in civilised peaceful countries. After 25 years of painstaking research worldwide the associates of the Institute of Taxation Research have pooled their databases to produce the most comprehensive collection of documents and information illuminating the legal basis on which the Australian taxation system is built. This research is fully protected under international copyright laws. Like all true academic resources the information held is of a factual basis only, supported by original documents where possible or certified or notarised copies of original government documents when these are the best available source. Any information, which is mere opinion, either legal or academic, is excluded from this database as not capable of independent verification. The services of the Institute will be made available to the wider business community through a system of selected consultants. The Background
to the Current Australian Taxation System. 1. The Myth Just 18 months away from the end of the 20th Century the vast bulk of Australians still believe we share a great democracy built on the rock of British law and Australian egalitarianism - in short one of the few truly free nations on earth where the taxes imposed are basically equitable and the taxation system is not based on corruption. At first glance this would appear to originate in our heritage of a mixture of English law and the Westminster political system, a strong injection of Irish humour and hubris, an independence of character moulded by the tough early days of the colonists’ experience and a bravery demonstrated in two world wars and a host of other smaller conflicts. The changing immigrant nature of our population has so far not modified the basic legal and political structure under which we live nor the basic taxation system. One of our major selling points to the rest of the investment world is the stability of our social system - not for us the turmoil and disruption of revolution. Australians are "too apathetic" to embrace radical change according to most media commentators. Yet very few of the above statements are really true. Real history tells a quite different story. 2. The Truth Despite the myth which has been widespread in recent years for political purposes Australia did not become a nation in 1901 either symbolically or legally. Six colonies were legally brought together in a single self governing colony called the "Commonwealth of Australia" although a number of the founding fathers objected to the term "Commonwealth" since it gave the impression of an independence and sovereignty Australia did not possess. The full name of the British Act, which created the Commonwealth, says it all, "The British Colony of the Commonwealth of Australia Constitution Act 1900 (UK)". However this Act is publicly known by a short title allowed by Section 2 of the Act - "The Commonwealth of Australia Constitution Act"- and the federal government never refers to the bill by its full and proper title at any time. Even official copies of the British Act are printed by the Government Printer without the correct title. The reason is easily discernible. In 1911 Australia, Canada, New Zealand and South Africa were given the new title of "Dominion" to distinguish them from other smaller colonies, at the same time all four remained colonies in all legal senses. When King George V declared war on Germany in 1914 on behalf of Great Britain and its colonies Australia and Australians found themselves at war. Thousands of Australians volunteered and went off to fight in the Middle East and Europe but a large slice of the population of Irish background, mindful of the activities of British troops in Ireland, refused to volunteer. An attempt by Labor Prime Minister William Morris Hughes to introduce conscription via referendum failed on two occasion in 1916/17 tearing the Labor Party apart resulting in Hughes switching political sides to become a non-Labor Prime Minister leading a pro-British government in a move which has had profound consequences even today. However at the Imperial War Conference of 1917 in London whilst these events were unfolding in Australia the British Government announced a decision on the basis of the contribution made to the war effort by Australia, Canada, South Africa, New Zealand and Newfoundland to have all five colonies become independent sovereign nations following the War but remaining within "an Imperial Commonwealth". It was decided by Resolution IX of this Conference that "the readjustment of constitutional relations of the component parts of the Empire is too important and intricate a subject to be dealt with during the War and that it should form the subject of a special Imperial Conference to be summoned as soon as possible after the cessation of hostilitieis." In one of the amazing twists of history this constitutional readjustment in Australia has never been implemented although international law requires that a country’s constitution on which the actions of its government depend in the wider world must be a sovereign document and not subject to the laws or government of any other nation. Unfortunately the 1901 Constitution was and remains solely an Act of the Westminster Parliament and is not in terms of international law a "document of sovereignty". The test is whether the Westminster Parliament could repeal the Act containing the 1901 Constitution and the United Kingdom Government has declared in writing to both the United Nations and to Australia that it retains this power. The other critical test is whether the 1901 Constitution in a legal sense survived the attainment of sovereign nation status by Australia. On 30th. June last year Hong Kong and the New Territories were ceded to the Peoples Republic of China bringing Hong Kong’s status as a British Colony to an end. Most people believe wrongly that this was simply the end of a 99 year lease so that reversion to China was largely automatic. In the case of the New Territories the lease situation did apply, but the island of Hong Kong itself was sovereign British territory ceded to the United Kingdom by the Treaty of Nanking of 1842. The position of Hong Kong island was exactly the same as Australia’s position on 9th. January 1920. It had a local parliament subject to direction from London. It had a British queen, a British governor, and English law applied in a way which made it superior to law made by the local assembly. In short it was a colony. But at one minute past midnight on 1st July 1997 Hong Kong stripped away every vestige of British colonial ownership, flags, coats of arms, troops and governor all departed powerless to affect the future of the island. At one minute past midnight on 10th. January 1920 the same legal criteria applied to Australia as a former colony. British colonial power no longer applied and what’s more this was guaranteed by a treaty signed by all the major international powers of the day, the Covenant of the League of Nations, a section of the Treaty of Versailles which ended World War One, not just by a treaty between the UK and China which covered the situation in Hong Kong. However 78 years later the Commonwealth and State Governments are still illegally using all of the mechanisms and trappings of British colonial rule and collecting tax unlawfully. At some stage Australia will create a new lawful tax system to which we will all be subject, but in the meantime tax collections are no more lawful than collections by an armed bandit running in the front door and threatening your staff..
3. The Consequences In strictly legal terms there is no lawful taxation system in Australia. Both the legislative power of the state and federal parliaments and the executive power of the governments possess no basis in law. The de facto reality however is that the Australia Taxation Office exists, the laws exist on paper, and the court and judicial system is still in place to coerce ordinary peaceful citizens into payment of whatever amount the ATO demands. The Institute of Taxation Research takes a totally different view. Having spent years investigating the flaws in the political and legal system the I.T.R. has developed methods of using elements of the existing de facto legal system against the ATO by using the overriding authority of the superior courts to paralyse the bureaucratic manoeuvres of taxation officials. In addition the Institute of Taxation Research is backing a series of High Court challenges to the legal and executive basis of the taxation system in the full knowledge that the ATO has no valid defence. Our experience shows that taxation officials will try every trick available to them to bluff taxpayers into parting with large amounts of money but when finally confronted by their own illegality a negotiated settlement can be reached if this is desirable or payment can be completely negated if that is the desired choice. In any case whilever the current taxation system remains in place payment of income tax, company tax or any other Commonwealth or state imposed tax can be made optional by the application of the correct legal procedures. It must be emphasised that every step follows clear legal guidelines and established court procedures. When a new fairer taxation system is established which encourages business activity these methods will be able to be put aside. In the meantime every businessman or businesswoman owes a duty to themselves, their shareholders and their employees to retain as much of the earnings and profits as possible within their business to increase its size and security. Every day you are forced to obey the law. Isn’t it time the Australian Taxation Office was forced to obey the law as well? |
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