IGT Review into GST Refunds 

The Inspector General of Taxation (IGT) has released his report into the Australian Taxation Office’s (ATO) verification of Goods and Services Tax (GST) refunds. Overall, the IGT has found that the ATO’s administration of GST refunds has operated efficiently with the vast majority of refunds released without being stopped for verification. Moreover, where refunds are stopped, the majority were processed and released within 14 to 28 days. 

The IGT made five recommendations (comprising 16 parts) to the ATO which were aimed at: 

  • developing a framework for continuous improvement of its automated risk assessment tools, 
  • streamlining its guidance to staff and implementing tools to assist them in complying with their obligations under section 8AAZLGA of the Taxation Administration Act 1953, 
  • enhancing information requests to taxpayers and providing a channel for pre-emptive provision of such information, 
  • improving its notification of when taxpayers’ objection rights to the retention of refunds has been triggered and assisting them to lodge such objections effectively, and 
  • raising awareness of staff and taxpayers about financial hardship issues, appropriately considering them and enabling automated partial release of refunds. 

The ATO has agreed in full or in part with all five recommendations (11 out of 16 parts). See also the ATO’s media release issued in response. 

One of the IGT’s recommendations was that the Government consider amending section 8AAZLGA of the Taxation Administration Act 1953 to allow the Commissioner, in appropriate cases, to effectively investigate and address risks of fraud where the seriousness of which has been established by means such as obtaining a Federal Court order. In response, the Government notes the recommendation and has indicated that it will consider options that balance the integrity of the GST system and the prompt issuing of GST refunds, and that careful consideration will be given to any impact on the ability of the ATO to conduct covert taxpayer reviews in cases of deliberate and egregious taxpayer fraud. 

Draft law to remove luxury car tax on re-imported cars refurbished overseas 

Treasury has released draft legislation to remove liability for luxury car tax from cars re-imported following service, repair or refurbishment overseas. This change was announced in the 2018-19 Federal Budget, and is proposed to take effect from 1 January 2019. Comments were due on the draft law by 8 August 2018. 

Draft law to collecting tobacco duties and taxes at the border 

Treasury has released draft legislation to support the crackdown on illicit tobacco. Specifically from 1 July 2019, importers will be required to pay all duty and tax liabilities when tobacco enters the country, rather than when it leaves a licensed warehouse and enters the domestic market. This will reduce the potential for leakage from warehouses to the black market. Comments were due on the draft law by 22 August 2018. See also the Government’s media release.   Illicit Tobacco Taskforce 

The Government has announced the Illicit Tobacco Taskforce which will target the AUD600 million dollars in tobacco duty which was forgone in 2015-16 due to the illicit tobacco market. The taskforce combines the operational, investigative and intelligence capabilities of the Australian Border Force, Department of Home Affairs, Australian Criminal Intelligence Commission, Australian Transaction Reports and Analysis Centre, Commonwealth Director of Public Prosecutions and the ATO.

Conveyancers and GST withholding for certain taxable supplies of property 

The Tax Practitioners Board has released guidance for conveyancers who are not tax agents assisting their clients with new GST withholding requirements on certain taxable supplies of new residential premises or potential residential land. 

GST on sanitary products 

The Government has announced that it will remove GST on sanitary products. The Federal Treasurer will take the proposal to the next meeting of the state and territory Treasurers. 

Update on Australia-Peru free trade agreement 

The Parliamentary Joint Standing Committee on Treaties has released and tabled a report which recommends that the Australia–Peru Free Trade Agreement be ratified and binding treaty action be taken.