You have to wonder what’s happened to taxpayers’ privacy of late when you pick up a paper and read about the tax problems of Paul Hogan and his business partner John Cornell.
And former world boxing champion Kostya Tszyu probably choked on his cornflakes yesterday when he read personal details of his tax affairs splashed across The Australian.
The published stories have all mentioned complex trust and company structures designed to defeat Australian tax laws and that the taxpayers are linked to the notorious Operation Wickenby. So have the leaks have come from the tax office or whether the stories are a result of good investigative journalism?
What I do know is that every year, Australian taxpayers provide a significant amount of information to the Tax Office about their income, expenditures and business affairs. Taxpayers provide this information expecting it to be kept confidential. Compliance with tax laws is more likely if taxpayers know that the information they provide can only be used for limited purposes.
In order to maintain taxpayer privacy and confidence, the secrecy provisions in Australia’s tax legislation impose strict obligations on tax officers and others who receive tax information.
Taxpayers are obliged by law to provide their personal information to the Tax Office. In turn, the Tax Office is obliged by law to protect that information. Tax secrecy provisions impose criminal sanctions for unlawful disclosure of information. These sanctions apply to the tax officer or any other person who receives and then unlawfully discloses taxpayer information.
Journalists and media organisations would have been aware of Section 8XB of the Taxation Administration Act which imposes a fine of $10,000, two years imprisonment or both if any person records, divulges or communicates to another person, or otherwise makes use of any information with respect to another person’s affairs which is or at any time has been in the tax office’s possession.
John Cornell said yesterday: “Despite the fact that Australian citizens are protected by the Tax Office Secrecy Act, I am being subjected to trial by media leak.”
I asked the tax office a series of questions about these highly embarrassing leaks including whether they have launched an internal investigation but they refused to comment.
I find their silence very bizarre as the integrity of their secrecy provisions is now under a dark cloud. Tax Commissioner Michael D’Ascenzo must make a public statement either supporting his officers or announcing he has launched an investigation into any alleged leaks.
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