EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 6
Issued by authority of the Assistant Treasurer
Taxation Administration Act 1953
Taxation Administration Amendment Regulations 2011 (No. 1)
Section 18 of the Taxation Administration Act 1953 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
These Regulations amend the Taxation Administration Regulations 1976 (the Principal Regulations) to prescribe the individual in a government entity who can swear/affirm an affidavit or make a statutory declaration, for the purposes of section 268-90 in Schedule 1 to the Act.
Both amendments replicate the effect of regulation 147G of the Income Tax Regulations 1936 (the 1936 Regulations). The regulations relate to estimates rules. Estimates rules enable the Commissioner of Taxation (the Commissioner) to make an estimate of amounts not paid by taxpayers, as required by the Pay As You Go (PAYG) withholding rules, and to recover the amount of the estimates.
Section 268-40 of the Act provides methods by which an estimate of a taxpayer’s underlying PAYG liability made by the Commissioner under section 268-10 may be reduced or revoked. Where the Commissioner has given a taxpayer a notice of estimate of that liability under section 268-15, the taxpayer may give the Commissioner a statutory declaration or affidavit within seven days from when the Commissioner gives the notice or such longer time as the Commissioner allows outlining the true amount of the liability.
Different rules and processes apply depending on the type of entity swearing/affirming the affidavit or making the statutory declaration. In relation to most entities (companies, individuals and superannuation funds for example), the required details are set out in the section. However, in relation to government entities (bodies politic and Australian government agencies), the section provides that the individual who may make a statutory declaration or swear/affirm an affidavit is to be prescribed by regulation. The regulation specifies a ‘public official of an Australian government agency who is responsible for the financial affairs of the agency’ as the prescribed individual in relation to a particular government body.
The Regulations form part of the re-write process for Divisions 8 and 10 of Part IV of the Income Tax Assessment Act 1936 (relating to estimates rules). Divisions 8 and 10 have now been rewritten into Division 268 in Schedule 1 to the Act. The Regulations replicate the effect of regulation 147G in the 1936 Regulations, which has been repealed by another minute.
These Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003 (LIA 2003).
Consultation was not undertaken in relation to this instrument because it was minor or machinery in nature and did not substantially change the law. Secondly, the regulations do not affect the public at large as they only apply to government entities.
Overview
The Taxation Administration Amendment Regulations 2011 (No. 1) were enacted to amend the Taxation Administration Regulations 1976, in response to the re-write of Divisions 8 and 10 of the Income Tax Assessment Act 1936 into Division 268 of the Taxation Administration Act 1953. These amendments were introduced to ensure the seamless continuation of existing processes and rules relating to estimates, specifically addressing the requirements for statutory declarations and affidavits from government entities in the context of Pay As You Go (PAYG) withholding rules. The Regulations were made under section 18 of the Taxation Administration Act 1953, allowing the Governor-General to prescribe necessary details for carrying out or giving effect to the Act. These Regulations were issued by authority of the Assistant Treasurer and aim to maintain the integrity and efficiency of the taxation system by clarifying the roles and responsibilities of government entities in financial declarations. As these amendments did not substantially alter the law or impact the broader public, consultation was deemed unnecessary.
Scope and Application
The Taxation Administration Amendment Regulations 2011 (No. 1) pertain to the Taxation Administration Act 1953 and modify the Taxation Administration Regulations 1976. Specifically, these regulations address the individual within a government entity who is authorised to swear or affirm an affidavit or make a statutory declaration, under section 268-90 of the Act. This applies to government entities, which include bodies politic and Australian government agencies. The prescribed individual is defined as a ‘public official of an Australian government agency who is responsible for the financial affairs of the agency’. The regulations are designed to streamline the process of making estimates under the Pay As You Go (PAYG) withholding rules, enabling the Commissioner of Taxation to estimate and recover amounts not paid by taxpayers. These regulations are integral to the broader rewrite of Divisions 8 and 10 of the Income Tax Assessment Act 1936 into Division 268 of Schedule 1 to the Act. Notably, the regulations do not apply to the general public but are confined to government entities, and consultation was not deemed necessary as the changes were considered minor and machinery in nature, not substantially altering the existing law.
Key Provisions
The Taxation Administration Amendment Regulations 2011 (No. 1) introduce specific provisions under section 268-90 of the Taxation Administration Act 1953, addressing the ability of individuals within government entities to swear or affirm an affidavit or make a statutory declaration in relation to Pay As You Go (PAYG) withholding rules. These regulations are crucial in clarifying which officials within government bodies can provide such declarations, thereby ensuring compliance with the PAYG withholding rules. Essentially, these regulations specify that the individual responsible for making the declaration must be a ‘public official of an Australian government agency who is responsible for the financial affairs of the agency’ (section 268-90). This ensures that only those with the appropriate authority and understanding of the agency’s financial obligations can make these declarations.
These regulations impose clear obligations on government entities by prescribing specific roles within those entities that are authorised to make statutory declarations or affidavits regarding PAYG liabilities. The intent is to streamline the process of providing accurate information to the Commissioner of Taxation when estimates are involved, ensuring that only those with the requisite knowledge and authority within the agency can provide such declarations. This helps maintain the integrity and accuracy of the information submitted to the Commissioner, thereby facilitating effective tax administration.
Failure to comply with the provisions set forth in these regulations may lead to inaccuracies in the estimation of PAYG liabilities, which could result in additional assessments or penalties. While the regulations themselves do not explicitly outline specific penalties for non-compliance, breaches could potentially lead to the imposition of additional taxes or interest on unpaid amounts, as well as other administrative consequences. It is important for government entities to adhere to these regulations to avoid such repercussions and ensure smooth interaction with the tax authorities.