Re-Writing the Tax Act
| Author | Tom Reid,Brian Nolan |
| DOI | 10.22145/flr.22.3.3 |
| Published date | 01 September 1994 |
| Date | 01 September 1994 |
| Subject Matter | Article |
RE-WRITING THE TAX ACT
Brian Nolan and Tom Reid*
There is agreement
that
the tax
law
is very complex
and
needs improvement.
At
that
level of generality it is
not
easy to attract
an
argument.
However
once one cuts
below
that
layer of
broad
agreement there has
not
been
the same level of
understanding
or
concord
on
what
can
be
done
to
put
things right.
It
is good to see positive signs
that
these issues deserve serious public debate so
that
we
can reach
common
ground
on
what
is achievable
by
the Tax Law Improvement Project.
BACKGROUND
The Joint Committee of Public Accounts recommended
in
its Report
on
an
Inquiry into
the Australian Taxation Office
in
November
19931
that
a broadly
based
task force
be
established to re-draft the Income Tax Assessment Act 1936 (Cth) (ITAA).
In
an
early
response
on
17 December 1993, the then Treasurer, the
Hon
John Dawkins MP,
announced
the Tax Law Improvement Project2 - a three-year
program
to reduce the
complexity of the income tax law
by
re-drafting it
with
a more coherent structure to
make
it
more
readily understood.
It
was
made
plain in the announcement
that
this
was
to achieve
enduring
improvements to the existing
law
rather
than
to review its
substantive provisions.
It
is tempting to drift into wistfulness about the state of things
in
1936
when
the
original Act fitted neatly into 126 pages -
in
stark contrast to the
more
than
5,000
pages
of difficult text
that
make
up
today's legislation.
How
did
we
get to the
present
position? The Act
has
been
added
to in every year since its introduction
in
1936
and
only seldom
have
existing provisions
been
repealed. Each set of changes has
been
grafted
on
to the existing
body
of law. While the Act
has
been
amended
every year, the
pace
of change has
been
accelerating. In
rough
measure the size of the Act has
been
doubling
every
seven years. In the decade to 1986 almost 1000 pages of text
were
added
and
the
pace
has
hardly
abated since then.
What
we
have
been
witnessing have
been
massive changes to the income tax
system. Some measures
have
made
the income tax base broader. Capital gains tax,3
1
2
3
Project Director, Tax Law Improvement Project,
and
Second Parliamentary Counsel,
respectively.
Report
No
326,
An
Assessment
of
Tax (1993).
Treasurer, Press Release
No
172, 17 December 1993.
Part IliA
of
IT
AA.
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