SMSF Adviser reported in May an announcement by the government about its plans to provide the commissioner of taxation with powers to allow simpler resolutions to “unforeseen or unintended outcomes in the taxation and superannuation law”.
The ATO also released a statement in May explaining that the statutory power will aim to provide a “more timely resolution of certain legislative problems” and “flexibility with certain legislative problems which cannot be resolved by way of interpretation”.
Treasury announced yesterday it is now seeking comments on the proposed legislation and accompanying memorandum.
The government said the consultation process will “provide stakeholders with the opportunity to provide input on the proposed exercise of the power”.
According to the new information released by Treasury, there will be two broad types of circumstances in which the commissioner will be able to exercise the remedial powers.
One of these is where the outcome provided by the law is inconsistent with the purpose or object of the law.
“In this case, the commissioner may modify the law to realign with its purpose or object,” said Treasury.
The commissioner can also use the proposed remedial powers in circumstances where the outcome provided by the law is consistent with its purpose or object, but in achieving that outcome the law’s application imposes compliance costs that are disproportionate to achieving its purpose or object.
“In this case, the commissioner may provide an outcome that reduces compliance costs, but is not inconsistent with the purpose or object of the law,” said Treasury.
The government said it anticipates the powers would reduce the time taken to make minor legislative corrections.
According to Treasury, they may also allow some minor technical corrections to be made where this might otherwise not occur.
“The commissioner will establish an administrative process to ensure that the Remedial Power will operate in a transparent and efficient manner,” said Treasury.
