THE LEGAL profession has for too long been “rorting” the taxation system and failing to comply with the law, the House of Representatives heard last week.
The Australian Labor Party’s member for Lowe, John Murphy MP, last week said he has for the last three and a half years tried to bring to account those members of the legal profession who fail to lodge tax returns.
The financial year 2002-03 revealed that 36 per cent of barristers and 28 per cent of solicitors were not up to date with their tax returns. As well, “most alarmingly”, 26 members of the judiciary were not up to date with their tax.
Murphy asked what sort of message this was sending the public. “At a time when the government are offering lower and middle income earners only $6 in tax relief, clearly the Government are not doing enough to support the taxation commissioner in cracking down on those dishonest members of the legal profession who have done nothing about their returns,” he said.
Murphy called on the Treasurer in November last year to provide statistics as to what proportion of barristers and solicitors failed to lodge a tax return between 1992 and 2002. As well, he asked what actions the Australian Taxation Office (ATO) took in response.
The replies, received last week by Murphy, said the ATO has “vigorously” pursued the lodgement of all outstanding returns, including using reminder notices and demands for lodgements, issuing summonses and prosecutions.
The Assistant Treasurer also revealed that 46 Australian solicitors were convicted of failing to lodge tax returns in the current financial year, and solicitors racked up $98,050 in fines. Fifty solicitors were convicted in 2003/04, with solicitors’ fines adding up to more than $68,000.
Barristers, as well, have been caught by the ATO for failing to lodge their returns. In the current financial year, nine barristers were convicted of failing to lodge a return, and this section of the profession was fined $25,020. This was down slightly from 2004, which saw 10 barristers convicted of failing to lodge tax returns, and fines reaching nearly $30,000.
The Assistant Treasurer’s response to Murphy’s questions also revealed that while in 1996 no members of the judiciary failed to lodge a tax return, in 2003, the number reached 26. Barristers saw a similar increase, with 26 convicted in 1996 compared to 239 in 2003.
Murphy told the House of Representatives he will pursue this issue with follow-up questions, “because members of the legal profession and members of the judiciary, more than anyone, should be meeting their taxation obligations”.
This is a very serious matter, Murphy said, and goes to the heart of public interest, being about protecting public revenue. “Those members of the legal profession should be honouring those obligations, and the Treasurer and the Assistant Treasurer should be doing much more to see that that matter is addressed,” he said.