* 4 gizdj? Australian Government Department of Immigration and Multicultural Affairs 5 October 2006 Mr Paul McCullough General Managerâ¨Tax System Review Divisionâ¨The Treasuryâ¨Langton Crescent PARKES ACT 2600 Dear Mr McCullough REVIEW OF TAXATION SECRECY AND DISCLOSURE PROVISIONS Thank you for the opportunity to comment on the discussion paper of the Review of Taxationâ¨Secrecy and Disclosure Provisions (the discussion paper), which proposes to introduce a newâ¨secrecy framework and standardise the tax secrecy and disclosure laws. I note that the Department of Immigration and Multicultural Affairs (the department) hasâ¨previously provided comments on a draft of the discussion paper on two occasions. On 18 Julyâ¨2005, Vincent McMahon, Executive Coordinator at the department, sent comments on a draftâ¨of the discussion paper to the Australian Taxation Office (the ATO). The Treasury then wroteâ¨to the Secretary of the department, Mr Andrew Metcalfe, on 9 September 2005 invitingâ¨comment on a further draft of the discussion paper. A response signed by Bob Correll, Actingâ¨Secretary of the department, was sent to Mr Mike Callaghan, Executive Director of theâ¨Revenue Group, Tax System Review Division at Treasury on 25 October 2005. The issues identified by Mr McMahon and Mr Correll continue to be relevant to the currentâ¨discussion paper. While supportive of the Treasury's plans to simplify and standardise theâ¨various tax law secrecy provisions within a new framework, the department believes that theâ¨current level of information disclosure between the ATO and the department already strikesâ¨the necessary balance between personal privacy and the government's objectives in relation toâ¨migration. We would therefore like to ensure that this exchange is maintained. In addition,â¨the department believes that further access to certain information held by the ATO is justifiedâ¨within the proposed framework. people our business 6 Chan Street Belconnen ACT 2617â¨PO Box 25 BELCONNEN ACT 2616 â¢ Telephone (02) 6264 1111 â¢ Facsimile (02) 6264 4466 â¢ Website: www.immi.gov.au The department's response to the questions for consultation are set out at ATTACHMENT A,â¨and additional comments addressing issues that are more specifically relevant to the department are at ATTACHMENT B. If you have any questions or wish to discuss any aspect of the department's submission,â¨please contact Stephanie Lynch, Senior Legal Officer, Legal Policy Section, on (02) 6264â¨2902. Yours sincerely (signed) Robyn Bicket Chief Lawyer * A fl Australian Government Department of Immigration and Multicultural Affairs ATTACHMENT A RESPONSE TO QUESTIONS FOR CONSULTATION 1. Should the tax secrecy and disclosure provisions be built around a primary principleâ¨of protecting taxpayers 'privacy? Protecting taxpayers' privacy should be one of the primary principles, but this privacy needsâ¨to be balanced with the government's needs to efficiently and effectively fulfil policy andâ¨legislative objectives. 2. Is there benefit in the idea that the various tax secrecy and disclosure provisionsâ¨should be standardised with the assistance of an information disclosure framework andâ¨placed in the Taxation Administration Act 1953? Yes. Standardisation within one piece of legislation with the assistance of a workableâ¨disclosure framework would help clarify the legislative requirements for secrecy andâ¨disclosure of taxation information. 3. What is the optimal balance between the protection of taxpayer information held byâ¨the Tax Office and the needfor disclosure to address government's informationâ¨requirements in delivering entitlements and meeting law enforcement and integrityâ¨provisions? It is difficult to generalise about what the optimal balance between taxpayer privacy and theâ¨need to address government objectives is for every circumstance. The department is of theâ¨understanding that the proposed framework within which standardisation of the tax secrecyâ¨and disclosure provisions will be based aims to achieve that balance with reference to fourâ¨different categories of disclosure on a scale of 'remoteness' of use from reasons originallyâ¨collected. The department submits that this may not necessarily achieve the desired balanceâ¨(see the department's Additional Comments at ATTACHMENT B). For example, althoughâ¨disclosing information for the purposes of investigating or prosecuting identity fraud underâ¨the Migration Act 1958 (the Migration Act) and the Citizenship Act 1948 (the Citizenshipâ¨Act) maybe at the more 'remote' end of the disclosure spectrum, preventing identity fraud isâ¨nevertheless an extremely important government objective. 4. Should a person who is given protected information under secrecy and disclosureâ¨provisions also be subject to strict secrecy requirements? Yes, unless there is legislation allowing further disclosure of that information. people our business 6 Chan Street Belconnen ACT 2617â¨PO Box 25 BELCONNEN ACT 2616 â¢ Telephone (02) 6264 1111 * Facsimile (02) 6225 6970 â¢ Website: www.immi.gov.au -2- 5. Should penalties for all offences in respect of unauthorised disclosures beâ¨standardised, or are there circumstances in which the penalties for breach of the taxâ¨secrecy and disclosure provisions should vary according to the type of tax involved? Nil response - this is not a matter on which the department is able to provide comment. 6. Do you agree that the further the use of the information is from the reason it wasâ¨collected, the greater the level ofjustification should be for the information to beâ¨disclosed? As discussed above in response to question three, this approach may not necessarily be theâ¨best approach for achieving effective and efficient fulfilment of government objectives. 7. Is there benefit in including a consent provision in the tax law to allow a taxpayer toâ¨request the Tax Office to provide their confidential information to a third party? Although the issue of consent for disclosure to third parties is generally covered by theâ¨Privacy Act 1988 (the Privacy Act), for the sake of completeness, it may be worthwhileâ¨including a consent provision in the tax secrecy and disclosure legislation. However, to avoidâ¨confusion, it may be beneficial that these provisions closely mirror the language used in theâ¨Privacy Act. 8. Should the Tax Office be able to disclose taxpayer information to law enforcementâ¨and intelligence agencies for the investigation and prosecution of non-tax relatedâ¨crimes? Yes. In addition, the ATO should also be able to disclose relevant information to otherâ¨agencies, such as the department, who are not 'law enforcement and intelligence agencies' asâ¨such, but nevertheless perform important enforcement and intelligence functions (see Additional Comments at ATTACHMENT B) 9. Should the Commissioner of Taxation, as an employer, have access to Tax Officeâ¨information about his employees and others providing services to the Tax Office? Nil response - this is not a matter on which the department is able to provide comment. 10. Should the Tax Office be able to disclose taxpayer information to a third party whoâ¨is owed a duty by the taxpayer? Yes. As the example provided in paragraph 5.4 of the discussion paper illustrates, suchâ¨disclosure would allow the ATO to provide information to an employee where the employerâ¨is failing to meet their legislative obligations to the employee. This may be useful in theâ¨migration context in relation to temporary business visas. However, the department wouldâ¨wish to be consulted about such disclosure and would prefer that it take place in a broaderâ¨scheme of information exchange between the ATO and the department (see Additional Comments at ATTACHMENT B). # & Australian Government Department of Immigration and Multicultural Affairs ATTACHMENT B REVIEW OF TAXATION SECRECY AND DISCLOSURE PROVISIONS CONSULATATION ON DISCUSSION PAPER ADDITIONAL COMMENTS The Department of Immigration and Multicultural Affairs (the department) appreciates theâ¨need to strike a balance between protecting personal information and the need to meet theâ¨information requirements necessary for effective administration of government. Theâ¨department agrees that clarification of taxation secrecy and disclosure provisions will helpâ¨in achieving that balance. While generally satisfied with the framework proposed in theâ¨discussion paper of the Review of Taxation Secrecy and Disclosure Provisions (theâ¨discussion paper), the department believes that the current level of information exchangeâ¨between the Australian Taxation Office (ATO) and the department already strikes theâ¨necessary balance between personal privacy and the government's objectives in relation toâ¨migration and would like to ensure that this exchange is maintained. In addition, theâ¨department believes that further access to certain information held by the ATO is justifiedâ¨within the proposed framework. Objectives of the Migration Act 1958 and the Australian Citizenship Act 1948 The Migration Act 1958 2. The object of the Migration Act 1958 (the Migration Act) is to regulate the entry andâ¨presence of non-citizens in Australia. The authority to enter and remain in Australia isâ¨often conditional on the non-citizen complying with certain visa conditions. A non-â¨citizen who does not comply with those conditions may have their authority to stay inâ¨Australia cancelled. The Migration Act provides that non-citizens without authority toâ¨remain in Australia must be detained and removed as soon as practicable. 3. The effective administration of the Migration Act depends on being able to obtainâ¨information about the whereabouts of non-citizens who have no authority to be inâ¨Australia, or whose permission to be in Australia may be cancelled. Significantâ¨resources are expended locating non-citizens who do not have authority to stay inâ¨Australia or who may have their authority cancelled for breaching visas conditions. people our business 6 Chan Street Belconnen ACT 2617â¨PO Box 25 BELCONNEN ACT 2616 â¢ Telephone (02) 6264 1111 * Facsimile (02) 6264 4466 â¢ Website: www.immi.gov.au Australian Citizenship Act 1948 4. The Australian Citizenship Act 1948 (the Citizenship Act) deals with the grant,â¨conferral and loss of Australian citizenship. The Citizenship Act recognises thatâ¨Australian citizenship represents formal membership of the Australian community andâ¨involves reciprocal rights and obligations. Persons granted Australian citizenshipâ¨enjoy these rights and undertake to accept these obligations by pledging loyalty toâ¨Australia and its people, sharing their democratic beliefs, respecting their rights andâ¨liberties, and by upholding and obeying the laws of Australia. A person who appliesâ¨for grant of Australian citizenship must satisfy criteria related to identity andâ¨residence. Current exemptions for disclosure 5. Access to information held by the ATO is vital in assisting the department to achieveâ¨effective enforcement of the migration law. Section 18 of the Migration Act enablesâ¨an "officer" to require a third party to provide information/documents about theâ¨identity or whereabouts of an unlawful non-citizen. As you are aware, the ATO is ableâ¨to release certain information to the department under section 16 of the Income Taxâ¨Assessment Act 1936 (Income Tax Act). Paragraph 16(4)(hd) of the Income Tax Actâ¨states that the Commissioner, or Second Commissioner or a Deputy Commissionerâ¨may communicate information to the Secretary of the department "...for the purposeâ¨of assisting in locating persons who are unlawfully in Australia. " The informationâ¨currently provided by the ATO mostly relates to residential and employment addressesâ¨of the unlawful non-citizen. 6. The discussion paper states (at page 17) that the disclosure to the department in theseâ¨circumstances is at "the remote end of the spectrum" on the information disclosureâ¨framework, requiring a very specific description of the reasons for disclosure. Theâ¨department submits that such disclosure is nevertheless justified and the proposedâ¨framework should continue to allow for such disclosure. Extending the current exemptions for disclosure 7. The Government has previously supported maintenance of the existing exemption inâ¨the Income Tax Act, and has also expressed support for a proposed amendment toâ¨extend the exemption in two circumstances. First, to authorise access and disclosure ofâ¨information to the department for the purposes of research relating to migration, andâ¨secondly, to extend the authority to require and disclose information for the purposesâ¨of locating non-citizens who are lawfully in Australia but who may be working inâ¨breach of their visa conditions. 8. The proposal to exchange data for the purposes of research relating to migrationâ¨involves the ATO matching data against movement records disclosed by theâ¨department, and the ATO providing, in exchange, generalised desensitised data withâ¨no identifying connection to individuals in the movement records. Under theâ¨proposed framework, the tax secrecy provisions need not protect non-identifying dataâ¨and it appears that the ATO could disclose such data to the department without requiring legislative authority to do so. However, proposed amendments to theâ¨Migration Act and the Income Tax Act provide a legislative basis for this disclosureâ¨by the ATO. The Migration Legislation (Information Management) Bill 2006 seeksâ¨to amend the Migration Act and the Income Tax Act to enable disclosure ofâ¨information between the department and the ATO for research purposes relatingâ¨migration. 9. The Migration Legislation (Information Management) Bill 2006 will also seek toâ¨amend section 18 of the Migration Act and section 16 of the Income Tax Act toâ¨authorise disclosure of information for the purposes of locating people who areâ¨lawfully in Australia but working in breach of their visa conditions. Theseâ¨amendments seek to extend the information provided to the department by the ATO,â¨in line with the Government's 1999 decision. It would be appreciated if theseâ¨proposed amendments are taken into account when making changes to the tax secrecyâ¨and disclosure provisions. . Further opportunities for information exchange 10. To ensure effective administration of portfolio legislation, the department would alsoâ¨benefit from obtaining further information from the ATO in the three mainâ¨circumstances discussed below. 11. In order to achieve this under the proposed framework, the department would seek toâ¨be a 'specifically listed' government department to which an officer may discloseâ¨protected information for the purposes of the Migration and Citizenship legislation. Ifâ¨the department were specifically listed, the department would then need to discussâ¨with the ATO whether, in the interests of standardising and simplifying the tax secrecyâ¨laws under the proposed framework, the specific exception to the prohibition onâ¨disclosure currently set out in paragraphl6(4)(hd) of the Income Tax Act would stillâ¨be required. Assisting in investigating offences under the Migration Act and the Citizenship Act 12. The law enforcement exception contained in section 3E of the Taxation Administration Act 1953 is not relevant to the department because the department doesâ¨not fall within the definition of Taw enforcement agency'. 13. Although the department is not a law enforcement agency it does deal with a range ofâ¨serious non- tax related criminal investigations and prosecutions. Administration ofâ¨the Migration and Citizenship Acts includes investigating persons who may beâ¨citizens or permanent residents who are acting criminally. As part of this theâ¨department is targeting organised and systematic fraud and non-compliance. Thisâ¨often involves labour organisers and migration agents who operate in the informal andâ¨cash economy and have a direct impact on the revenue base through their illegalâ¨activities. These activities may also involve criminal exploitation of legal and illegalâ¨workers, something which is of considerable concern to Government. 14. It is also unclear whether Information Privacy Principle 11.1(e) under the Privacy Actâ¨1988 fully covers disclosure of information to the department for the purposes of investigating offences under the Migration Act and the Citizenship Act, such asâ¨migration, citizenship and identity fraud. The department acknowledges that the ATOâ¨has been helpful in providing information where it can, but clarification of theâ¨circumstances allowing disclosure of information to the department for the purposesâ¨of investigating offences under migration law is needed. Assisting identification ofpersons suspected of being unlawful non-citizens 15. Limitations on the department's ability to access information held by other government departments can hinder identification of persons who have been detained,â¨or may be detained, under reasonable suspicion of being an unlawful non-citizen. Theâ¨ability to cross-check information about a person with ATO records could be ofâ¨enormous benefit in these circumstances. Such disclosure is not presently possibleâ¨because the disclosure provision at paragraph 16(4)(hd) of the Tax Act. Thatâ¨provision only allows disclosure to the department in order to facilitate "locatingâ¨persons who are unlawfully in Australia" rather than identifying those persons afterâ¨they have been located. Assist in investigating possible breaches of sponsorship conditions for temporary businessâ¨visas 16. Under existing legislation, the department is unable to obtain information from theâ¨' ATO about the 'good standing' of employers who seek to employ a temporary business visa applicant. An employer who seeks to sponsor a temporary business visaâ¨applicant must agree to certain undertakings before the sponsorship is approved. Oneâ¨of the requirements is that the employer pay a Minimum Salary Level (MSL) to theâ¨visa holder. Information exchange between the department and the ATO wouldâ¨greatly assist in monitoring an employer's compliance with their obligations andâ¨streamline the process of checking whether MSL is being paid to a visa holder.â¨Additionally, where the department as referred a case to the ATO for investigation, itâ¨would allow the ATO to provide information about the outcome of that investigationâ¨to the department for further assessment and action. Identity and residence verification for citizenship 17. One of the requirements for grant of a certificate of Australian citizenship is that theâ¨person is a permanent resident who has been present in Australia as a permanentâ¨resident for a period of, or for periods amounting in the aggregate to, not less than oneâ¨year during the period of two years immediately before applying for citizenship, or forâ¨a period of, or for periods amounting in the aggregate to, not less than two yearsâ¨during the period of five years immediately before applying for citizenship (seeâ¨section 13 of the Citizenship Act). Information held by the ATO would be helpful inâ¨verifying these residence requirements before grant of a citizenship certificate.â¨Information held by the ATO would also be of assistance in verifying the identity of aâ¨person applying for citizenship. Implementation issues 18. The department also wishes to be involved in discussions in relation to the practicalâ¨implementation of new tax secrecy and disclosure provisions. Data exchange betweenâ¨the department and the ATO should have a clear governance mandate and complyâ¨with legislative and policy frameworks. As you will be aware, the Australianâ¨Government Information Management Office has developed the Informationâ¨Interoperability Framework, which provides practical guidance for achieving theâ¨successful transfer of information across agency boundaries. From a data managementâ¨perspective it would be invaluable to take this opportunity to further address the needâ¨for a whole of Government approach to metadata standards to enable agencies to haveâ¨a more effective understanding of data that might prove useful in their businessâ¨requirements.
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