A proposed new law would effectively empower the Australian Taxation Office (ATO) to bankrupt a business overnight where the ATO held an unproven view that PAYG tax was owed.
The law denies normal access to justice and the truth. It represents a scary step in a progressive crushing of the rule of law in Australia under the excuse of tax collection. We’ve made a submission opposing the Bill.
The law would authorise the Australian Taxation Office to deny tax deductibility of payments to employees, contractors and others where the ATO alleged that the paying party should have made PAYG tax withholding remittances on the payments. The ATO would not be required to prove the facts of its case before it acted.
We oppose the Bill because:
- The ATO abuses its current powers and cannot be trusted. We explain this in our submission.
- The Bill will expand the ATO’s unaccountable powers and would give the ATO the power of life and death over businesses on the basis of unproven ATO allegations.
- The Bill goes beyond the intent stated in the Black Economy Taskforce Report and will enable the ATO to do considerable harm to the economy.
- The rationale for the Bill as stated in the Black Economy Taskforce Report is illogical. When examined, it appears to be nothing more than a grab for additional ATO power.
- The ATO already has extensive power to sanction improper black economy behaviour and if it is not being successful in this regard, it can only be because the ATO is inept and incompetent.
- The Bill is unconstitutional.
We say that the Bill should not proceed, nor should it be contemplated until such time as the ATO has imposed upon it effective, proper and independent oversight to stop it abusing its powers and until it begins to operate in an ethical, moral and legal manner.