Government to simplify indirect tax system

Australia's indirect taxes, including GST, will be self-assessed like income tax under government legislation which aims to simplify tax law.

David Bradbury, parliamentary secretary to the Treasurer, told Parliament today the self-actuating system for GST, luxury car tax, wine equalisation tax and fuel tax credits would be harmonised with the income tax system of self-assessment.

This would give effect to recommendations by the Board of Taxation's review.

"These amendments are consistent with the government's continuing focus on simplifying the tax system, and implement improvements to the tax laws that have been contemplated by governments for nearly two decades," Mr Bradbury said.

Although the debate on the Indirect Tax Laws Amendments (Assessment) Bill 2012 has been adjourned, some proposed amendments to Legislation are as follows:

Schedule 1 of the Bill amends the Taxation Administration Act 1953, the A New Tax System (Goods and Services Tax) Act 1999 and other taxation Acts to harmonise the current self actuating system that applies to the goods and services tax, the luxury car tax, the wine equalisation tax and fuel tax credits with the self assessment system for income tax.

Schedule 2 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 and the Fuel Tax Act 2006 to legislate the Commissioner of Taxation’s power to make a determination allowing a taxpayer to take into account, on his or her goods and services tax or fuel tax return for the current tax period or fuel tax return period, errors made in working out net amounts and net fuel amounts for preceding tax periods or fuel tax return periods.

Schedule 3 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to confirm that the luxury car tax and the wine equalisation tax are part of the ‘net amount’ that is calculated under the GST Act. Schedule 3 also makes amendments to create a single ‘net amount’ definition that applies differently to reflect differing circumstances.

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