It’s the vibe

A quote from an article in today’s AFR:

ATO second commissioner Jeremy Hirschhorn has warned the four firms – Deloitte, EY (the former Ernst & Young) KPMG and PwC – that they need to rein in “hired gun” and “guru” tax partners that come up with overly aggressive tax schemes that are technically legal but represent a risk to the taxation base.

That’s right. The ATO does not want tax advisors working for their clients but rather working for the ATO.

Hows this for an idea. Simplify the tax system – and put all those tax advisors and ATO people into actual productive work.

Legislative and regulative complexity is a subsidy – from those who can’t afford expensive advice to those who can.

Not just in tax but in all activities.

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45 Responses to It’s the vibe

  1. nfw

    Imagine the ATO being upset with something that is legal. I always thought it was the job of politicians to determine what is illegal (note, if something is not illegal it is axiomatically “legal”) not unelected public servants. Now that’s an oxymoron these days isn’t it? I needed some help from my local federal member (who went on to become PM) and he was too frightened to take on the totalitarians in the ATO.

  2. C.L.

    Just wow.
    Don’t you love the weasel phrase “technically legal”?
    Which of course means legal.

    Legislative and regulative complexity is a subsidy – from those who can’t afford expensive advice to those who can.

    I hadn’t thought of it that way before. That’s so true.

  3. Pyrmonter

    It’s a variation on bootleggers and Baptists: the ATO needs tax cheats and their advisors to justify the existence of many of its own powers and the prosperity of its senior staff.

  4. pete m

    With so many provisions in the tax las that deem legal actions illegal, no surprise she says technically legal, because they haven’t yet made it illegal. But just wait you keep being tricky and we’ll make it illegal.

  5. Tel

    Hows this for an idea. Simplify the tax system – and put all those tax advisors and ATO people into actual productive work.

    Gosh! The old tariff system was easy to understand. Not so popular with economists, but then those guys completely ignore the secondary effects like legislative complexity, loss of privacy and all the other problems that the income tax system imposes.

    What’s worse, with the way GST works, we still need all the machinery of border monitoring and tariff collection, just to pick up 10% and then we need all the other machinery for corporate taxes and income taxes. Better to throw away income tax (the worst tax ever invented) and go back to the simple tariff collection at the border. Then you watch … every government would watch the border like the Eye of Sauron once their income depends on that.

  6. mh

    Simplify the tax system – and put all those tax advisors and ATO people into actual productive work.

    What type of productive work would they do?

  7. Sinclair Davidson

    Damn accountants. Being competent at doing their jobs.

  8. JC

    It’s a race each week between those smarmy taxeating dickheads at the ATO to see who gets quoted first threatening citizens. This dirtbag started it. By the way, he earns a million a year making threats. Looks really conformable.

  9. Woolfe

    My wife is a myob consultant she said most accountants work for ato.

  10. Tel

    … she said most accountants work for ato.

    I only halfway work for the ATO … they let me keep the other half.

    Modern sharecropping.

  11. nb

    Hilariously stupid!
    Given that ‘overly aggressive’ is an entirely subjective term and can mean anything at all, the Tax Office has now declared that to protect oneself from their aggression one must not ‘engage in tax schemes that represent a risk to the taxation base’.
    The tax office has taken over the legislature, and wishes to enforce arbitrary rule!
    Who said the administrative state was not getting way out of control?

  12. mh

    Could be meaning advice like “ Let’s get you qualified for an R & D tax offset.”

    Government interference leading to government complaining about exploitation of government interference.

  13. John Barr

    How about this. 10% Tax on everything, including Gross income from any & all or any source’s. Double Tax if the money is going overseas or to an offshore account. No deductions for anything what-so-ever.

    Applies to everyone & everything.

  14. struth

    Jeremy needs a smack in the mouth.

  15. Eyrie

    “Watch the borders like the eye of Sauron”
    Yes, Tel, then it will be up to Mr Kipling’s “poor honest men”.

  16. Jock

    Auditors of SMSF are already required to report transactions and schemes to the ATO (not the Trustees) which they suspect may be in breach of the Tax Act. This was done to supposedly save money in the ATO but I doubt it. The Auditors of Industry and Public Funds dont of course have the same obligations.

  17. Kneel

    Don’t you love the weasel phrase “technically legal”?
    Which of course means legal.

    Where is the same complaint about VW’s issues with “cheating” the emissions rules on diesels? They met the rules and still had to pay a fine etc – outrageous! Were I the CEO of VW, I would have said “see you in court” and refused to pay. You made the rules, I obeyed them, and now you say “you don’t meet the intent” – WTF? Can I get off a speeding fine because the intent of the law was to increase safety, and I was not being detrimental to safety by doing 130km/h on a freeway with 5km visibility and no traffic? I don’t think so!
    Ditto tax – rules are written, if I obey them, what is your complaint? That the rules aren’t what you intended? YOU FREAKING WROTE ‘EM! If they’re not what you intend, how the hell can I know?
    Wankers.

  18. Bunyip Bill

    Abolish all existing taxation,national, state, local. Through computerised banking. Extract 0.3% of all withdrawals by everybody, charities, churches, pensioners,political parties, you name it . No exemptions. We would be able to fund everything as of now, and pay off our national debt in super quick time. Do the math . You will be suprised.

  19. Tel

    Were I the CEO of VW, I would have said “see you in court” and refused to pay. You made the rules, I obeyed them, and now you say “you don’t meet the intent” – WTF?

    Yup, same here.

    But as I pointed out to JC … the CEO of a big corporation like VW has almost no skin in the game and doesn’t care too much about wiping off shareholder value … especially when oh well, can’t be helped, not my responsibility. The CEO does care about personal reputation and getting invited to the right parties in order to land the next big gig.

    The EPA test was a pile of shit and everyone (including the EPA) was aware of that, but it’s not about any genuine environmental protection, it’s about making those bureaucrats feel useful, and more importantly the public image of the bureaucrats. VW was punished for an act of disrespect to their betters.

  20. FelixKruell

    I think his point was that the scheme is technically legal, but may fall foul of the anti-avoidance provisions. Meaning they become illegal once the court confirms the anti-avoidance provisions apply (often many years later).

    Which does raise the issue of the anti-avoidance provisions, which are the lazy way Governments use of the not paying the price for poor legislative drafting and complexity in the tax laws.

  21. John Constantine

    The Big Crony tax law firms go full woke and make the big crony political donations, exactly so Crony Tax law is written to require their superprofit services.

    ‘The Ton’ has constructed an economic niche, where the most expensive Big Crony firms can claim to have the Crony State issued concession to ‘ get their clients off ‘.

    This works for the ‘ we are us’ kleptonomics class.

    Comrades.

  22. BoyfromTottenham

    Does anyone remember that the auditing firms were required to separate (if not divest) their ‘advisory’ services from their ‘audit’ services a couple of decades ago? Has the government and the ATO forgotten this? They need to dust off the records and read them – maybe the rules were too slack, or maybe the regulators have been asleep at the wheel, or perhaps these firms have just figured out how to dodge around the aim of these rules.

  23. Bruce

    Anyone got the latest Newspeak on the difference between “Tax Evasion” and Tax Avoidance”?

  24. Perth Trader

    As explained to me . When you walk into Coles or Woolworths and a item is sold for less than 50% of the recommended sales price these 2 companies dont collect GST from you the buyer, and so the GST they pay the wholesalers is a credit to the ATO . The next time you see those 2 for the price of 1 sales the discount is absorbed by the wholesalers. All legit.

  25. Mother Lode

    What is the difference between ‘legal’ and ‘technically legal’?

    I expect the difference springs from an idea of what ‘ought’ to be illegal.

    For the ATO anything they cannot get their covetous paws on is an affront.

    As far as they are concerned, every dollar you possess is only technically yours.

    And they want the laws amended accordingly.

    If I had a son or daughter who worked for the ATO I would try to hide the shame by telling people they were serving time for molesting pre-pubescent gerbils in front of school kids on public transport.

  26. Percy Popinjay

    Anyone got the latest Newspeak on the difference between “Tax Evasion” and Tax Avoidance”?

    The braindead lamestream media (with lots of assistance from the shitheads in the ATO, the labore pardy and the greenfilth) are valiantly trying to portray such activities as being one and the same.

  27. Have you seen this little turd?

    https://proxy.duckduckgo.com/iu/?u=http%3A%2F%2Fzoomnexus.com%2Fwp-content%2Fuploads%2F2019%2F03%2F3b35d76fab33eae27ec76983f4d4940a.jpg&f=1&nofb=1

    Little man’s disease. Ho got power and he will use it. He might even make you wear your jocks on your head, if it pleases the little ratf*ker

  28. @Perth Trader

    As explained to me . When you walk into Coles or Woolworths ….

    Nonsense. 80-90% of items sold in Coles and Woolworths don’t attract GST in the first place because food is not subject to GST. By your logic, everyone who supplies to Coles/Woolworths would be incentivised to inflate the RRP to arb the tax with Coles/Woolworths.

    The RRP of milk just went up to $20 per litre. Special today (and every day) is $1 per litre milk. No GST in the first place, but ….

  29. JC

    Don’t you love the weasel phrase “technically legal”?

    Edit suggestion

    Don’t you love the tax eating weasel’s phrase…..

    FMD. They’re despicable.

  30. Pyrmonter

    @ duncanm

    A wise man who, in his time, was a contender for the best rent-seeker in the country. Never made a cent in an industry not subject to regulation with wide ministerial discretion.

  31. FelixKruell

    Perth:

    As explained to me . When you walk into Coles or Woolworths and a item is sold for less than 50% of the recommended sales price these 2 companies dont collect GST from you the buyer, and so the GST they pay the wholesalers is a credit to the ATO . The next time you see those 2 for the price of 1 sales the discount is absorbed by the wholesalers. All legit.

    Not at all legit. That’s not how it works. Coles and Woolies would still be paying GST, just based on the lower price you paid.

  32. Dr Fred Lenin

    Could it be that the lawyers drafting the legistlation deliberately build in flaws that they know other lawyers will be anke to exploit for their clients benefit ? Perhaps a little reward is given for this service .
    Maybe it should be compulsory to write all laws in English instead of Legalese,a language full of ambiguities . English is so much simpler .

  33. The BigBlueCat

    duncanm
    #3154726, posted on September 13, 2019 at 1:31 pm
    A wise man once said..

    I agree with KP … we have a personal obligation to pay only as much tax as we technically should. And unless we are directly employed by the ATO, we owe them nothing other than what the law requires. Tax is an impost, and the ATO is virtually a law unto themselves. They are bullies of the first order, who act like thugs when they want to. We can, and should, structure our affairs to legally minimise our tax exposures. It’s bad enough the government working out ways to hoover tax revenue from us by ever-increasing complications to the tax laws.

    Pyrmonter
    #3154764, posted on September 13, 2019 at 2:35 pm
    @ duncanm

    A wise man who, in his time, was a contender for the best rent-seeker in the country. Never made a cent in an industry not subject to regulation with wide ministerial discretion.

    That’s as may be … but in the context of what he said about taxation, he is dead on. And in terms of the inquiry into media ownership he was required to attend, they couldn’t lay a glove on him. As usual, the ALP types thought they had him, but he only proved how little they knew about business and Companies law. It was a joy to watch.

    “Of course I am minimising my tax. And if anybody in this country doesn’t minimise their tax, they want their heads read, because as a government, I can tell you you’re not spending it that well that we should be donating extra!”

  34. John A

    That’s right. The ATO does not want tax advisors working for their clients but rather working for the ATO.

    Well, the ATO is using the original definition of a “Registered Tax Agent”

    which is:

    “an agent of the Commissioner for Taxation”

    The Second Commisar err, Commissioner is reminding them of their putative role in protecting the position of their principal – alliteratively speaking, of course.

  35. Crossie

    So that’s where Darryl Kerrigan’s lawyer Dennis Denuto ended up, at ATO.

  36. Crossie

    We can laugh but the ATO bastards could sue you knowing full well they will lose but they made you spend oodles to defend yourself. They don’t care where the money goes as long as you no longer have it. Legal fraternity never loses whether they work for the government or for high priced law firms.

  37. Sean

    “The liability to pay income tax is wholly derived from the law imposing and providing for the assessment of that tax. The obligation to pay it is a legal one. Some politicians try to treat it as a moral obligation. But it is not. The citizen is bound to pay no more tax than the statute requires him to pay according to the relevant state of his affairs.” Former High Court Justice Sir Garfield Barwick in his memoirs cited in Myers, A. J. (2005). Tax Avoidance and the High Court since Sir Garfield Barwick. Lecture delivered at the Melbourne Law School, University of Melbourne, 12.

  38. Nob

    Legislative and regulative complexity is a subsidy – from those who can’t afford expensive advice to those who can

    .
    That is a liberty quote.

    SJW politicians waffling on about Big Business, Big End of Town etc always hurt SMEs most.

    Not just the advice but the cost of compliance, extra staff that add no value etc.

  39. Frank Walker from National Tiles

    ATO second commissioner Jeremy Hirschhorn has warned the four firms – Deloitte, EY (the former Ernst & Young) KPMG and PwC – that they need to rein in “hired gun” and “guru” tax partners that come up with overly aggressive tax schemes that are technically legal but represent a risk to the taxation base.

    Wrong cocksucker.

    Legal is legal. The public ought to have the right to walk around your office and watch you work, worm.

  40. Gavin R Putland

    Legislative and regulative complexity is a subsidy – from those who can’t afford expensive advice to those who can.

    Amen. It’s also a broken window.

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