Explanatory Memorandum
(Circulated by authority of the Minister for Family and Community Services, Senator the Honourable Jocelyn Newman)Schedule 4 - Amendment of the Income Tax Assessment Act 1936
1. Summary of proposed changes
The amendments made by this Schedule to the Income Tax Assessment Act 1936 (the Tax Assessment Act), combined with the amendments contained in Schedules 2 and 5, authorise the use of tax file numbers (TFNs) as the primary matching key for data-matching purposes.
2. Background
With the exception of data matching against tax returns conducted under the Data-Matching Program, TFNs cannot be used in Centrelink/Australian Tax Office data matching for compliance purposes. The Australian Tax Office (ATO) currently provides Centrelink with Employment Declaration Form, Prescribed Payment System and Reportable Payment System data on a regular basis, with matching being carried out using identity data (eg name, date of birth etc). There are difficulties in identifying customers who inadvertently or deliberately provide different personal details to the ATO and Centrelink. This measure provides for TFNs to be used as the primary matching key.
Section 202 of the Tax Assessment Act deals with the objects sought to be achieved by the establishment of the tax file number system.
3. Explanation of the changes
Item 1 of Schedule 4 amends section 202 of the Tax Assessment Act to provide that one of the objects of the establishment of the TFN system is the facilitation of the administration of section 204A of the Administration Act. In combination with the amendment contained in Schedule 5, the effect of that change is that, where TFNs are used pursuant to section 204A of the Social Security (Administration) Act 1999 , that use is lawful.