Controversy over release of the final schemes report

Amid controversy, the third and final report of the Senate Inquiry into Mass Marketed Tax Effective Schemes was released this week.

Former Chair of the Senate Committee, Senator Shayne Murphy, did not sign the majority report, instead issuing a minority report, which was scathing towards the ATO.

It said: “Across the board, evidence presented to the committee suggests that, at best, confusion reigned supreme and,

at worst, the management and application of the tax laws of

this country was downright incompetent.”

Senator Peter Cook, a signatory to the main report, endorsed the broad thrust of the minority report:

“I believe Senator Murphy picks up the issues of the ATO’s role in these matters as well as the issues of prospectuses, product rulings and promoters’ commissions much better than your report.”

Recommendations from the major report included:

p providing the ATO with the power to prevent the marketing of, and investment in tax-abusive arrangements

p reviewing the public interest responsibility that tax professionals should adopt for the integrity of the tax system

p publishing test case funding criteria

p analysing current mechanisms for obtaining judicial resolution of disputed or contentious tax law interpretation

p seeking advice on the question of the adequacy of the current measures for monitoring the schemes market and

p a number of measures aimed at improving taxpayer awareness.

Senator Cook expressed his preference that the two reports

be combined, however the committee could not agree in time.

All the senate committees were dissolved at midnight on Monday night, before the opening of the new Federal Parliament on Tuesday..

Unlike other committees, the Senate Economics Reference Committee was not able to re-form. Senator Murphy, now an independent, is no longer eligible to chair the committee, and deputy Acting Chair Senator Brian Gibson is understood to have resigned from the committee.

The final schemes report was presented to the President of the Senate only hours before the committee was dissolved.

Presenting the report prior to the disssolution of the committee then ensured it was subject to parliamentary privilege and thus the Senators immuned from question and impeachment in the courts.

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