The tax office is considering going easy on people who are late making their GST payments where it does not involve a loss of tax revenue.
Under a recently released draft internal practice statement, the tax office advises staff that where the practical effect of correcting an error is “revenue neutral”, consideration will be given to waiving general interest charges.
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The draft statement suggests the interest charge could be waived in circumstances such as:
- Where a supplier fails to include GST in the price of a taxable supply and that supply is made to a recipient who would have been entitled to claim a full input tax credit if they were issued with a valid tax invoice.
- Where the wrong entity accounts for the GST or claims an input tax credit, for example in partnership or joint venture situation.
GST payers will be able to lodge a request with the tax office to have their general interest charge waived or remitted under the proposal. The tax office is seeking comments on the draft guidelines until 21 January 2008.
The taxman has also come under pressure to put a limit on how long it is able to wait to audit and revise tax bills for businesses and individuals.
Groups including CPA Australia, the National Institute of Accountants and the Taxation Institute have urged the tax office to introduce a limit on the amount of time it has in which to act, except in cases of fraud or dishonesty.