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Federal Government Announces Another Review of Tax System

February 2004

On 24 November 2003, Federal Treasurer Peter Costello announced a new Federal government review of the self-assessment tax system that has operated for 11 years. This follows Inspector-General David Vos’ findings that the tax system is plagued by 60 systemic problems. In particular, the ATO ruling system will be re-examined and the review will consider setting tighter time limits on the ATO for amendment of tax returns and the length of tax audits. Under the current system, the ATO generally has 4 years to alter past tax returns or longer in cases of fraud or evasion. The crackdowns on mass-marketed tax schemes promoted to middle-class income earners (attracted by the weight of the top tax bracket which they enter as a result of bracket creep) have made the Federal government feel more vulnerable in an election year.

The initial consultations will be held over the next few months, followed by extensive public consultations, and the completed review is expected to be handed to the government by mid-2004 in time for the election

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