There has been a proposal for the Commissioner of Taxation to be given a ‘statutory remedial power’ (sometimes described as the ‘Commissioner’s Discretion’) to give greater flexibility in dealing with legislative problems which cannot be resolved by way of interpretation (and where legislative change is maybe taking too long).
A recent speech by Second Commissioner Andrew Mills outlined how this might work.
During the course of last year, a working group was set up to examine this proposal comprising the ATO, Treasury and representatives of the tax, accounting and legal professions.
The consultation phase is now complete and the working group has produced a joint Statement of Intent about what such a remedial power could try to achieve.
It proposes that the Commissioner may vary the law (in favour of the taxpayer) in two types of circumstances:
The ATO envisages that a remedial power would provide a mechanism for resolving unintended and anomalous outcomes or disproportionate compliance costs in the tax law more quickly than is possible through the existing legislative amendment process.
The power may also have a broader benefit for the tax system by allowing minor technical corrections that wouldn’t otherwise happen.
The proposal now needs to be considered by government to progress this concept.
Whatever form it takes, the exercise of the power must be public and open to scrutiny.
Those issues that may not be able to be dealt with by the power would continue to be considered under existing policy and law development processes.