Queensland Treasurer

No more taxation by policy decree please!

Business abhors uncertainty. How many times has this been said? But the practice of issuing “Administrative Arrangements” in Queensland can leave business unsure as to what they should do.

On 21 July 2021, the QRO issued “Public Ruling DA000.16.2” to provide stamp duty relief on small business restructures under the Duties Act. Although the policy behind this will be welcomed by small business, its implementation is sadly poorly thought through. It’s a new unlegislated exemption, an extra statutory concession.

There are four major problems with this Public Ruling.

  • “Administrative Arrangements” are beyond the Commissioner’s powers under the Taxation Administration Act 2001. As this “Administrative Arrangement” is not law, a taxpayer cannot contest in the usual way a decision of the Commissioner that it doesn’t apply. The Commissioner is not bound by this “Administrative Arrangement” and must enforce the law at the time.
  • No private ruling is available, let alone a binding private ruling similar to the ATO. Under paragraph 24, a taxpayer takes their chances that the exemption will apply, and the Commissioner will abide by it.
  • There are so many vague terms and phrases. Paragraph 24 requires a taxpayer, when applying for the exemption, to submit “the information required by the Commissioner”. Where is that information? Form D2.2 doesn’t really help.
  • CGT experts say that some of the examples in this “Administrative Arrangement” don’t take into account all of the CGT rollover provisions.

What consultation , if any, was undertaken with professional bodies or others?

The term “Administrative Arrangement” must be kept to real, within power matters of day-to-day administration, not to granting extra statutory exemptions changing the law. If a mechanism by which urgent changes in the law are necessary, then provide a statutory framework to do it. Retrospective legislation has problems, not the least of which is will that legislation be the same is the “Administrative Arrangement “.

Has QRO properly informed taxpayers and self-assessors? That observation brings into view the less than satisfactory manner in which the QRO tells taxpayers/self-assessors about changes in administration. More on that another time. Without proper advice to outsiders, taxpayers/self-assessors are ambushed. That raises the question as to whether the QRO ever applies the maxim “Eat your own dogfood” to find out how satisfactory your organisation is to deal with from a consumer’s point of view. Ever tried finding something on the relevant jurisdictions’ website!

Retrospective legislation has problems, not the least of which is whether that will be the same as the “Administrative Arrangement “.

Business certainty requires:

  • Clearly drafted rules to go by, which is lacking here;
  • No beyond power taxation by policy decree but according to legislation passed by Parliament;
  • Consultation to ensure that taxation in other jurisdictions, especially Commonwealth, is taken into account. There is no use providing an exemption if it doesn’t work across all jurisdictions.