Review of the Legal Framework for the Administration of the GST

Background

On 11 June 2008 the Assistant Treasurer announced that he had asked the Board of Taxation to undertake a review of the legal framework for the administration of the GST. This review replaced the Board’s previous review of the application of the self-assessment principles to other taxes administered by the Taxation Commissioner. In addition, the Board was asked to consider the implications of any possible changes to GST administration provisions for other indirect taxes that currently share common tax administration provisions in the Tax Administration Act or the GST Act. The focus of the review was:

• Streamlining and improving the operation of the GST;
• Reducing compliance costs; and
• Removing anomalies.

In pursuing the terms of reference, the Board  was asked that its consultations and recommendations focus on the legal framework for the administration of the GST as set out in the Tax Administration Act and GST Act. The Board’s review did not extend to the rate of the GST or the scope and extent of what goods and services are subject to the GST.

The Board appointed a working group of its members comprising Eric Mayne (Chairman), Chris Jordan AO, Curt Rendall and Dick Warburton AO to oversee the Board’s review. The Board was asked to consult with stakeholders including small and large businesses, professional bodies and State and Territory Governments. The Board was asked to provide a final report to the Government by the end of December 2008.

Issues Paper

On 18 July 2008, the Board of Taxation released its issues paper on the Review of the legal framework for the administration of the GST. The Chairman of the Board of Taxation announced the release of the issues paper via a press release. The Board developed the issues paper to facilitate public consultation.

The Board held extensive consultation with stakeholders in August 2008. Consultation meetings were held in Sydney, Brisbane, Melbourne, Darwin, Perth and Albury. The Board requested written submissions on the review of the legal framework for the administration of the GST by 15 September 2008. All submissions received were acknowledged.

The Board’s Report

The Board completed its review of the legal framework for the administration of the GST and provided its report to the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs in December 2008. In preparing its report the Board took into account the various submissions to the review, discussions with stakeholders and the consultants’ evaluations.

Government Response

On 12 May 2009, the Assistant Treasurer announced the release of the Board of Taxation’s report  on its review of the legal framework of the administration of the GST. The release of the report was welcomed by the Chairman of the Board of Taxation, Mr Richard Warburton AO. While overall the Board found that the GST is operating effectively, there are some aspects of the tax that impose unnecessarily high compliance costs on taxpayers. The Board put forward 46 recommendations, 41 of which were initially supported by Government. Support for three measures was subsequently withdrawn.

In response to the Board’s recommendation, on 12 May 2009 the Assistant Treasurer announced that he has asked the Board to undertake a review of the application of GST to cross‑border transactions. Further information on this new review and the terms of reference can be found on the Review of GST Cross‑Border page.

Of the remaining 38 recommendations, 25 were implemented. In December 2013, the Government announced that any outstanding measures that were announced but unenacted would not proceed. The Government announced that it would proceed with one of the outstanding 13 recommendations. The Government subsequently announced in the 2015-16 Budget that it would not proceed with the Board’s ‘reverse charge for going concerns and farmland’ recommendation.

For further information about this review please contact the Board of Taxation Secretariat at taxboard@treasury.gov.au or on (02) 6263 4366.

Submissions received