The world according to GRP — Thursday, June 01, 2006:
Unconstitutional compliance costs — Part II
Further to my letter in the Melbourne Age on March 8, 2006, the Australian Financial Review published the following on April 10:
State must pay for complexity
In answer to recent complaints about the complexity of the federal tax system, I note that the parliament would have a powerful incentive to simplify the system if the compliance costs were fully chargeable to the commonwealth.
Well, it so happens that section 82 of the constitution says: "The costs, charges, and expenses incident to the collection, management, and receipt of the Consolidated Revenue Fund shall form the first charge thereon..." The compliance costs of the tax system would appear to be "costs" or "expenses" incidental to the "collection" of revenue, in which case they are fully payable by the commonwealth — not merely deductible against taxable income.
Anyone being taken to the cleaners by the Australian Taxation Office should threaten to sue for a full refund of past compliance costs under s82. I suspect that the ATO would back down rather than let s82 go before the High Court.
If such threats and backdowns were to become common, the parliament would hastily simplify the tax laws in order to plug the leak.
Gavin R. Putland... .
Again the response was silence.
Copyright © Gavin R. Putland except as otherwise attributed. Posted at The world according to GRP under the title Unconstitutional compliance costs — Part II. You may republish this item verbatim on your website or blog provided that you include this notice (with hyperlinks).
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