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Australian tax controversies and human rights 8 September, by Justin Dabner

Increasing conflicts and fears of overreach by tax administrators have seen many countries generate taxpayer-specific statements of rights. Australia has a Taxpayer’s Charter but experience with this illustrates the limitations of both the Charter, unsupported by legislative mandate, and the traditional legal remedies in the resolution of tax controversies. The evident need for more effective recognition of taxpayers’ rights has resulted in the Inspector-General of Taxation currently reviewing the Charter.

Current administrative review processes are inadequate

Most tax controversies of an administrative nature are intended to be dealt with under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the “Judicial Review Act”). In rare situations review is also possible pursuant to s.39B of the Judiciary Act 1903 (Cth). Nevertheless, circumstances can arise where a taxpayer aggrieved by a decision of the Australian Taxation Office (ATO) cannot have that decision reviewed. This can occur where a matter neither gives rise to a “taxation decision,” thereby making it reviewable under the usual process in Part IVC of the Taxation Administration Act 1953 (Cth), nor a “decision…under an enactment,” reviewable under the Judicial Review Act.

The lack of legal remedy is also at the heart of the criticisms that have been voiced suggesting that the ATO’s Taxpayers’ Charter is inadequate. The Charter outlines, amongst other things, the rights of taxpayers and the service and standards to be expected from the ATO. However, it creates no legal rights. Since the issue of the Charter, in many instances taxpayers and their advisers have had to resort to lobbying politicians, publicity campaigns and even strikes in order to remedy heavy-handed administration. Well-connected and resourced taxpayers may have the luxury of embarking on such campaigns, but the average taxpayer lacking a legal remedy is left to the vagaries of the ATO’s internal dispute resolution procedure or that of the Commonwealth Ombudsman and, now, Inspector-General of Taxation.

Human rights protection in Australia

Running contemporaneously with the debate over the better protection of taxpayers’ rights is the more fundamental issue of the protection of human rights generally. Australia stands almost alone as a Western democracy that has so far resisted the proclamation of a bill of rights notwithstanding strong support for such a measure. Clearly such a development would be much more significant and pervasive than a bill of rights solely focused on taxpayers. However one outcome could be that citizens in their capacity as taxpayers might also receive some protection under such a bill.

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