EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 408
ISSUED BY THE AUTHORITY OF THE TREASURER
These regulations amending the Income Tax Regulations will increase the level of penalties for offences against the Principal Regulations and make a number of amendments consequential upon amendments to the Income Tax Assessment Act 1936 (the Act) by the Taxation Laws Amendment Act 1984 (the amending Act) which was assented to on 19 October 1984.
Regulation 1 facilitates references to the Income Tax Regulations which are referred to as the “Principal Regulations”.
Regulation 2 will repeal Part VII of the Principal Regulations which contains procedural rules that relate to prosecutions for offences under the Act. The repeal of this Part is consequential upon the repeal of Part VII of the Act by the amending Act and the enactment in the Taxation Administration Act 1953 of consolidated offence and prosecution provisions in relation to the various taxation laws.
Regulation 3 will delete the specific penalty contained in sub-regulation 58LA(2) with the result that the penalty for contravention of regulation 58LA will be that specified by regulation 65 being inserted by regulation 4.
Regulation 4 repeals the existing regulation 65 and substitutes a new regulation 65, which stipulates that a person who contravenes any provision of the Principal Regulations for which a penalty is not expressly provided is guilty of an offence for which the maximum penalty is $500.
The First Schedule to the Principal Regulations contains forms which are prescribed for purposes of Part VII of the Principal Regulations and sub-section 220(5) of the Act. Section 220 authorises the Commissioner to make an assessment of the amount of tax payable up to the date of death of a deceased taxpayer where probate has not been granted or letters of administration taken out within 6 months of death, and order certain persons to recover assessed tax from any assets of the deceased taxpayer. By regulation 52, such an order must be in accordance with Form 9 of the First Schedule. Regulation 5 will substitute a new Form 9 for the existing Form 9 in consequence of amendments to section 220 by the amending Act. Regulation 5 will also omit Form 10 (Notice of Election by the Defendant to Have a Taxation Prosecution Tried in a Higher Court) and Form 11 (Certificate of Order under the Income Tax Assessment Act 1936) in consequence of the enactment by the amending Act of consolidated offence and prosecution provisions in relation to the various taxation laws in the Taxation Administration Act 1953.
By reason of section 8 of the Acts Interpretation Act 1901, the Commissioner may continue to institute taxation prosecutions under Part VII of the Act in relation to offences committed prior to the repeal of that Part by the amending Act.
Sub-regulation 6(1) contains transitional rules which will ensure that regulations which presently apply to such prosecutions - regulations 55, 56, 57 and 58 - may continue to apply notwithstanding the repeal of those regulations by regulation 2.
Sub-regulation 6(2) provides that where the term “the Act” is used in the regulation, it is to be taken to mean the Income Tax Assessment Act 1936.
Overview
The Income Tax Regulations 1984, enacted by the Parliament of Australia, aim to address the need for increased penalties against offences under the Income Tax Assessment Act 1936. This was necessitated by the introduction of the Taxation Laws Amendment Act 1984, which sought to consolidate and update the taxation laws to ensure they effectively deter non-compliance and uphold the integrity of the tax system. The explanatory statement accompanying the Statutory Rules 1984 No. 408 outlines the amendments made to the Income Tax Regulations in response to these legislative changes, including the introduction of new penalty provisions and the repeal of outdated procedural rules. The overarching policy objective is to streamline and modernise the tax administration process, ensuring that penalties for tax-related offences are commensurate with the seriousness of the violations.
Scope and Application
The Income Tax Regulations 1984, as amended by Statutory Rules 1984 No. 408, apply to all persons and entities liable to tax under the Income Tax Assessment Act 1936, including individuals, companies, trustees, and other bodies subject to the Act. The regulations pertain to procedural rules and penalties for contraventions of the Act, extending to all forms of taxation-related offences across the Commonwealth of Australia. The regulations include increased penalties for certain offences and consequential amendments following changes made by the Taxation Laws Amendment Act 1984, which repealed certain sections of the Income Tax Assessment Act 1936 and consolidated offence and prosecution provisions into the Taxation Administration Act 1953. Specifically, the regulations repeal Part VII of the Principal Regulations, which previously contained procedural rules for taxation prosecutions, and substitute new penalties and forms as per the amendments. The regulations also include transitional provisions to ensure continued applicability of certain rules for ongoing prosecutions of offences committed before the repeal.
Key Provisions
The statutory rules primarily focus on amending the Income Tax Regulations by increasing penalties for breaches and making necessary consequential amendments in light of changes introduced by the Taxation Laws Amendment Act 1984. Regulation 1 establishes that the Income Tax Regulations are referred to as the "Principal Regulations." Regulation 2 repeals Part VII of these Principal Regulations, which contained procedural rules for prosecutions under the Income Tax Assessment Act 1936, as this part was repealed by the amending Act and consolidated offence and prosecution provisions were introduced in the Taxation Administration Act 1953. Regulation 3 removes a specific penalty from sub-regulation 58LA(2), ensuring that the penalty for contravention of regulation 58LA will now be as specified in the new regulation 65 introduced by regulation 4. Regulation 4 introduces a new regulation 65, stipulating that any contravention of the Principal Regulations for which a specific penalty is not provided will result in an offence with a maximum penalty of $500.
These regulations impose several obligations on the parties they govern. They mandate the repeal of certain procedural rules for taxation prosecutions and the substitution of new forms to align with updated provisions in the Income Tax Assessment Act 1936 and the Taxation Administration Act 1953. The regulations also ensure that existing rules for taxation prosecutions can still apply to offences committed before the repeal of Part VII of the Act, through transitional provisions outlined in sub-regulation 6(1). Additionally, they clarify that the term "the Act" in the regulations refers to the Income Tax Assessment Act 1936.
Under these statutory rules, any contravention of the amended regulations, particularly the new penalty provisions, can lead to civil or criminal consequences. The most significant change is the introduction of a maximum penalty of $500 for any contravention of the Principal Regulations where a specific penalty is not otherwise provided. This penalty is intended to deter non-compliance and ensure adherence to the updated regulatory framework. The transitional provisions in sub-regulation 6(1) also ensure that ongoing prosecutions for offences committed before the repeal of Part VII will still be governed by the existing rules.