GST Advisory Group record of meeting, June 2014
Venue: ATO Latitude East, Sydney
Date: 24 June 2014
Start: 9.45 am Finish: 3.30 pm
Chair: James O'Halloran
Secretariat: Alison Zeitlhofer, Indirect Tax, Contact phone: 02 6216 1013
James O’Halloran (Chair), Deputy Commissioner, Indirect Tax, ATO
Gordon Brysland, Assistant Commissioner, Tax Counsel Network, ATO
Paul Southwell, Assistant Commissioner, Government and Cross-Agency Relations, ATO
Rob Dalla-Costa, Senior Advisor, Small Business Tax, Treasury
John Corlis, States and Territories Representative
Chris Plakias, Head of Tax, GST and Technology Westpac, Member, Australian Bankers’ Association
Ken Fehily, Principal, Fehily Advisory, Member, CPA Australia
George Nikolaou, Manager, GST, WET and Excise, Coles Finance
Michelle de Niese, Assistant Director, Corporate Tax Association
Peter Strong, Executive Director, Council of Small Business of Australia
Andrew Howe, Director, Greenwoods and Freehills Pty Ltd, Member, Property Council of Australia
Andrew Sommer, Partner, Clayton and Utz, Member, Law Council of Australia
Matthew Nicholls, Executive Director, Ernst and Young, Member, The Tax Institute
Rebecca Millar, Professor of Law, University of Sydney
Julia Donohue, Director, Hoffman Donohue Pty Ltd (Facilitator)
Mark Morris, Senior Tax Counsel, CPA Australia
Donna Bagnall, Senior Tax Policy Advisor, Institute of Chartered Accountants in Australia
Michael Evans , Taxsifu, Institute of Chartered Accountants in Australia
Giles Wilmer, Director, Commonwealth Taxes Unit, Queensland Treasury
Jeremy Geale, Partner, KPMG, The Tax Institute
Andrew Orme, Acting Deputy Chief Tax Counsel, ATO
Grahame Tanna, Assistant Commissioner, Dispute Resolution Service, ATO
Alison Zeitlhofer, Director, State and Territory and Community Relations, Indirect Tax, ATO
The chair confirmed that the ATO was committed to ensure mutually beneficial consultation takes place and that the focus is not the process of consultation itself, but finding ways to ensure meaningful and purposeful engagement of value to all.
The ATO is committed to the ongoing administration and policy design of GST, one indication being this specific stewardship committee.
At the foundation of this stewardship committee is the ability to share intellect, views, and enable and encourage appropriate open discussion. Attendees were updated on the GST Advisory Group Statement of intent and agreed understanding for dealing with information that is confidential.
The meeting agenda and re-scheduling arose as a result of various meetings and discussions with members to co-design an agenda and approach to the topics of interest to members, including to address as fast as was practical, some suggestion of emerging systemic risk in GST litigation matters.
The chair advised that as discussed out of session with some of the members of this committee it was felt that there was value in inviting some additional GST experts from the community, the profession, and an additional representative on behalf of the States and Territories.
Small Business perspective and deregulation
The ATO has embarked on red tape reduction activities in line with the government policy of de-cluttering regulation. It considered the Board of Taxation (BoT) Review of Tax Impediments Facing Small Business announced in March 2014 a valuable opportunity to be leveraged if possible, noting that any deregulation affecting Small Business has the potential to impact a large population. The BoT will report to Government by 31 August 2014.
It was suggested, that where once it was assumed those who go into business should know what they are getting into, there is much more recognition nowadays that Small Business cannot be good at everything, including complying with government regulation.
It was determined that most suggestions for red-tape reduction made at the February GST Advisory Group meeting require law change. The ATO’s advocacy process, or the upcoming white paper on taxation if appropriate, will be considered as avenues to progress such suggestions. At this meeting the GST Advisory Group looked for ways to simplify interactions while maintaining the revenue base, and also encouraging compliant behaviour, mindful of the focus of submissions made to the BoT review.
Some suggestions from attendees included:
- alternative approaches to debt resolution, earlier engagement so that businesses are aware of their liabilities sooner, shortening debt repayment arrangements before entities become unsustainable, and formalising knowledgeable contact points with the ATO
- improved quality of audit and review outcome correspondence
- consideration of a flat rate GST to simplify GST rate application.
Interaction between GST and other taxes
A preliminary discussion occurred on ways to identify interactions between GST and other taxation laws to highlight the complexity and opportunity as a separate focus for deregulation. Documenting the interactions and impacts between the various taxes should lead to a better understanding of what the consequences are when policy changes are made. A number of instances of interactions with GST were provided as examples, including capital gains tax when property is sold, fringe benefits tax in entertainment transactions, sale of going concerns in relation to stamp duty, and consolidations.
It was broadly agreed there was utility in non-ATO members identifying instances where there were key interactions between the operation of the GST law, other indirect taxes and income tax. Such an approach would assist the ATO in identifying areas of concern and, as refined, could be used to assist in integrated tax design. It was agreed that the ATO would co-ordinate feedback from members and develop a matrix to assist understanding on intended or unintended overlaps.
GST litigation landscape
The ATO leadership has set a new direction with early dispute resolution at the forefront. Initiatives include the dispute resolution forum, independent review process, and for smaller business, use of in-house facilitation. Attendees agreed that the Alternative Dispute Resolution process is working well.
Attendees discussed the GST litigation landscape by examining a range of GST cases and litigation over recent years. In discussion, the ATO’s approach was outlined, and members’ views shared. This session focussed on:
- tax administration law - technical and procedural errors
- arguments put forward by the ATO resulting in unintended outcomes which were foreseeable
- raising arguments for the first time in final appeal proceedings
- test case funding selection.
With some suggestion these elements meant the ATO was at times not a model litigant, the States and Territories shared their alternate view that the ATO is a model litigant. The States and Territories also advised that they are happy for constructive industry input on significant issues and matters of debate as were covered in the discussion, but urged that respective State Ministers are approached with specific concerns in order to raise the profile of GST-related matters.
It was agreed:
- the agenda items were appropriate for discussion in the stewardship forum and member contributions covered a wide range of alternative viewpoints.
- members would participate in suggested consultation activities
- including a broader group was beneficial for this particular meeting; additional guests will be invited on an as needs basis to future meetings.
Melbourne - 15 October 2014