Media release: 6 February 2000
IDENTITY FRAUD TO DOMINATE TAX FILE NUMBERS HEARINGS
Identity fraud and the effectiveness of the operation of the Tax File
Number (TFN) system will be the focus of discussions next week when the
House Economics Committee holds its next TFN hearing in Sydney on Thursday
10 February 2000.
Committee Chairman, Mr David Hawker MP, said "Appearing before the Committee
will be the Australian Bankers' Association (ABA), major banks and credit
organisations, prominent tax practitioners, the Australian Transactions
and Analysis Centre (AUSTRAC) and the NSW Registry of Births, Deaths and
Marriages."
"The ABA will be asked to expand on its public calls for more stringent
Proof of Identity standards" Mr Hawker said. In their submission to the
inquiry, the ABA urged that the government follow the United States' lead
in setting uniform national standards for the production and issue of
identity documents. The ABA is also a strong supporter of the introduction
of biometric identification. Other perspectives on this matter will be
put by the banks and credit unions.
Identity fraud is also a major issue for the NSW Registry of Births,
Deaths and Marriages, who have advised the Committee that they are "concerned
at the increasing number of counterfeit birth certificates being used
for fraudulent purposes". The Registry will outline current proposals
to reduce identity fraud. They will also be asked about lessons from their
record keeping practices that could be applied to tax file numbers by
the ATO.
Mr Hawker said that "The Taxation Institute of Australia has raised
significant doubts about the efficiency of the operation of the TFN system
and called into question the depth of research behind the ANAO report,
stating that 'the ANAO recommendations for expansion of the system are
at best ambit claims'." The basis for the TIA's claims and other concerns
will be discussed in a roundtable session with tax agents, lawyers, academics
and accountants.
AUSTRAC has also noted concern with ANAO recommendations, claiming that
extending the use of the TFN is likely to raise cost and privacy concerns.
AUSTRAC has held back from giving a firm view on the proposal due to the
need to consult. Mr Hawker said "AUSTRAC will be asked to explain why,
given that one of their key objectives is to facilitate enforcement of
taxation laws, they have failed to consult on this proposal during the
two years since it was recommended by the Cash Economy Taskforce in 1998".
Financial institutions will also be asked their views on the need to
reform and extend TFN quotation and withholding tax arrangements.
Mr Hawker said that, to date, the major issues arising in the inquiry
are:
- large numbers of duplicate and redundant tax file numbers - the Audit
Office found 3.2 million more TFNs in Australia than people, including
nearly 200,000 potential duplicate TFNs, and a failure by the ATO to
identify deceased clients, deregistered companies and non-residents
who are no longer living in Australia;
- the increasing levels of identity fraud within Australia and the ease
with which false identities can currently be established;
- the ease with which non-residents can currently avoid their full tax
obligation, and the inability of the ATO to detect the fraudulent use
of non-residents' TFNs; and
- potential tax evasion due to the significant range of financial transactions
that are not subject to TFN quotation or withholding tax.
"Despite the ATO's heavy workload with the GST, the ATO must co-operate
to put these critical TFN issues right" said Mr Hawker. "After all, the
TFN is at the foundation of our tax system".
Copies of submissions from the Taxation Institute of Australia, NSW
Registry of Births, Deaths and Marriages, AUSTRAC and the Australian Bankers
Association are available from the Committee's secretariat or website
at:
http://www.aph.gov.au/house/committee/efpa/TFNaudit/tfnindex.htm
Ends // 6 February 2000
Further information:
David Hawker MP (Chairman) 02 - 6277 4100 (Parliament House)
Melissa Stutsel (Principal Research Officer) 02 - 6277 2319
Email: EFPA.Reps@aph.gov.au
Public Hearing Program
Date:
Thursday 10 February 2000
Time:
10:00am - 12:00am Roundtable Discussion
with tax practitioners:
- Taxation Institute of Australia
- Australian Society of Certified Practising Accountants
- Institute of Chartered Accountants in Australia
- Australian Taxation Studies Program (UNSW)
- Earle and Company Pty Ltd (Chartered Accountants)
1:00pm - 2:00pm NSW Registry of Births,
Deaths and Marriages
2:00pm - 3:00pm AUSTRAC
3:15pm - 5:00pm Financial Institutions:
- Australian Bankers' Association
- Westpac
- Colonial
- Credit Union Services Corporation (Australia) Ltd
- Endeavour Credit Union
Location:
Rooms 814 and 815
State Parliament House
Macquarie Street, Sydney NSW
Committee Membership 39th Parliament
Chairman: Mr David Hawker MP
Deputy Chairman: Mr Gregory Wilton MP
Members:
Mr Anthony Albanese MP
Ms Anna Burke MP
Ms Teresa Gambaro MP
Mrs Kay Hull MP
Mr Mark Latham MP
Mr Christopher Pyne MP
Hon Alex Somlyay MP
Dr Andrew Southcott MP
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