If state and federal politicians were eligible for the $950 cash bonus payment, 7.8% of them would not get it because they have not lodged their 2008 income tax return.
The Oz today revealed the softly softly approach by the Australian Taxation Office was not working in trying to get recalcitrant politicians to lodge their yearly tax return. Crikey has been told the rort extends to three current and former federal and state ministers who refuse to lodge their tax returns. I cannot name them as I would be breaching the strict secrecy laws that govern our tax system. Unlike the ATO who have leaked like a sieve during Operation Wickenby I will respect the law.
I have previously told Crikey readers about the failure of the ATO’s Restricted Access Taxpayer System (RATS). The ATO afford politicians, industry barons, judges, magistrates, ATO staff and other high profile people an extra level of security. They are classified Restricted Access Taxpayers or RATS as we liked to call them. As I reported back then the system has been rorted to allow this special group of taxpayers to dodge their taxation responsibilities including lodging tax returns on time and paying their tax debts.
So what’s the answer to this problem? Prosecute the buggers I say. The namby-pamby approach just isn’t working.
Tax Chief Michael D’Ascenzo prosecuted around 2,500 Australians for not lodging a tax return on time in the ’07-08 year but only one of them was a politician according to the Oz report. Great system!
During a major tax inquiry in 1993 Parliament’s powerful Joint Committee of Public Accounts and Audit put politicians’ tax position on the line which is understood to have frightened senior tax officers. Its then chairman Gary Punch, the former member for Barton in Sydney said:
…if we get to the stage — and this applies to the Customs Service or anywhere else; it does not matter whether it is Liberal, Labor or Callithumpian — where people are being singled out because they are public office holders, then public office holders will eventually be terribly fearful of taking on any or every bureaucracy to reform anything in this country. It will come to the point where we will all put our backs to the wall and slug it out, as I said to you Commissioner once before, on a unity ticket.
My own and clients’ experience has been that, a few young Turks in the ATO excepted, ATO people generally treat civilised, apparently reasonably honest if not completely diligent, taxpayers in a civilised way and it is a pity that some people don’t get treated that way There is a public interest case for not harrying the RATS too much or too publicly because, on balance, it would not be helpful to have it generally thought that no one can be relied on to take their tax obligations seriously as might be the case if judges and polticians were being constantly pilloried. And it would often be unfair because some people’s tax affairs can easily turn complicated enough to require them to clear their minds from their everyday work and set aside quite a lot of unproductive time to get the tax matters straight. Furthermore, the ATO shouldn’t expose itself to readily to the horrible truth that tax law and even tax practice is too complicated for nearly all those who work for it, as it is for 99.99 per cent of the population and that there is monstrous inefficiency which can be to a taxpayer’s disadvantage. How about actually losing several tax returns so that, when extensions are next asked for the answer is “but you haven’t put in last year’s returns” which was provably false. I have come across similar situations more than once and it is quite capable of throwing a taxpayer’s allocation of time completely awry if he tries to put the ATO’s demands first rather than do the natural postponing until it is procrastination. So, let’s not get on our high horses even if we happen to be amongst the fortunate few who always have every i dotted and t crossed in their lives. It certainly is not correlated highly with intellect, imagination, public spirit, open-mindedness or most of the other qualities we would put high on the list of priorities for judges, MPs and even public servants (auditors perhaps excepted).
For years and years there was a major problem with the judges and lawyers and ATO enforcement staff were constantly stymied in their attempts to force them to lodge and pay. Then there was a change of opinion and they became the focus of a major and very public enforcement campaign. I suspect the same thing may happen with the politicians and that today’s story in the Australian is a deliberate plant to try and stir them into action.
It is entirely possible that these 7.8% of parlimentarians have not been required to lodge their 2008 return yet. As he should know, individuals who use the services of a registered tax agent to lodge their return receive extensions of time to lodge. Generally, if an individual received a refund for the 2007 year and doesn’t have significant business income their due date for lodgement of their 2008 tax return will be 15 May 2009. So the size of the problem may be nowhere near as dramatic as Chris is trying to make out.
Name and shame them. Most aussie taxpayers have the money stolen from their pay packets and have to hire someone every year to get it back. The Koalas(protected ) just do it when they feel like it. The tax laws should be for all.