Today, 17 April 2016, is the 19th anniversary of the grant of the Royal Assent to the Income Tax Assessment Act 1997 .
The 1997 Act was part of the so-called Tax Law Improvement Project, a program announced by Treasurer Dawkins on 17 December 1993 “to reduce the complexity of the income tax law by re-drafting it with a more coherent structure to make it more readily understood”.
The commentary at the time referred to the then 5000 pages of “difficult text” contained in the Income Tax Assessment Act 1936.
In their 1994 article for the Federal Law Review (Volume 22, Page 448), Re-writing the Tax Act, Brian Nolan and Tom Reid said:
The Tax Law Improvement Project offers the chance to catch up and assimilate the accumulated mix of changes and original law into a coherent whole that is presented in a modem and much more user-friendly format. In doing this it is hoped to achieve some important goals. The re-writing of the tax legislation must be undertaken with the identity and needs of its main users clearly in view. With that focus it is far likelier to achieve the goal that it be easier for users to have access to the law and understandwhat is required of them. …
In the end, the success of the project will be measured not simply by whether the bulk of the Act has been greatly reduced nor by its felicity of expression. The overarching criterion by which it will be judged is whether it will have reduced materially the community costs of compliance with the tax law. Excessive costs of compliance are generated if law is too complex in design and obscure in articulation. Law that is easier to understand, and so less costly to comply with, can also produce other valuable community benefits.
Any review of the the 1997 Act – in its 20th year – would find it difficult to pronounce the project a success on these measures.
Nevertheless, the 80th anniversary of the much criticised 1936 Act is opportune to measure the current state of the income tax law. No doubt the income tax law is too complex in design and articulation for with which even the most skilled might comply.