new Tax Commissioner Michael D’Ascenzo has been in the job less than a
month, but we’ve already had an insight into the way the ATO will
operate under his leadership – his speech
to the Australasian Tax Teachers’ Association on Monday was the first
time since the Robert Gerard fiasco that we’ve heard anything out of
the tax office hierarchy.
It was essentially the same old motherhood statements about a
vision for a world class tax administration, consultation, reducing red
tape, treating taxpayers with fairness, integrity and honesty, as well
as repeated commitments to integrity and accountability.
and accountability? Sorry Mr D’Ascenzo but until someone from the ATO
or the government explains what happened in the Gerard Industries case,
where a company allegedly involved in international tax avoidance got
off without penalties or prosecution, and how a comfort letter was
provided to Mr Gerard which facilitated his appointment to the Reserve
Bank board, ordinary Australians will have a perception that the big
end of town, with access to the upper echelons of the ATO, can have the
odd favour done.
And if the Gerard case had not been plucked from the Supreme Court Registry by a Financial Review
reporter we would be none the wiser today. The secrecy provisions of
the tax act make sure that any company’s dirty laundry will only be
known by the tax office. So what other ATO settlements of big corporate
taxpayers have become public knowledge?
And why hasn’t Treasurer Peter Costello been called to account for allowing the ATO to
defy parliamentary committee recommendations regarding the publicising
of settlement statistics over five years. In 2000 the Senate Economics
Committee conducted an inquiry
into the ATO after serious allegations were made about their
administration (including client settlement guidelines) on Channel
Nine’s Sunday program.
The two settlements were made in the 90s. In the first one, Adsteam were let off$800
million due to alleged political urging about concerns the company may
be tipped over the edge due to the tax bill. Employment consequences
and the impact on the local economy of such a large corporate collapse
were thought to be the motivation behind this concern. The other
settlement belongs to Australia’s second richest man, Frank Lowy, when
he had $25 million wiped off his corporate tax bill.
evidence of a number of settlements that have caused alarm in the
general community. And we’ve seen the government and the ATO hiding
behind the secrecy provisions of the tax act. We need to change the law
so there is more transparency in the settlement process of big
corporate taxpayers. Mr D’Ascenzo says in his speech, “However, if we
have one plea for external scrutineers, it is that the criticism be
constructive, based on facts, and linked to viable options for change…”
So here’s a viable option for change: set up a bi-partisan
parliamentary committee that would approve any corporate settlement
over $10 million. Ensure these decisions are videotaped and reported to
parliament in the Commissioner’s annual report. Now that would be