The Taxi Council of Queensland (TCQ) is cautioning the Palaszczuk Government about making the same mistake as its Victorian counterpart in relation to lump sum payments to taxi licence owners.
The Sun Herald recently reported that the Andrews Government could have to pay a multi-million-dollar tab to cover the tax component of its licence buyback scheme.
“The Victorian Government erred by not thinking through the tax implications of their lump sum payments. Instead of structuring the payments so that the ATO could legitimately treat them as not assessable, they apparently want to beg the ATO to change the rules especially for them,” said TCQ chief executive officer Blair Davies.
“It smacks of lazy policy and disingenuous representation of affected licence owners’ interests.
“The headline suggested that the Andrews Government may pay the tax on behalf of Victorian taxi licence owners. It would be the right thing for them to do to take responsibility for their own bungle, however, the more likely outcome will be the old Pontius Pilate trick of washing their hands of the matter and pretending the blame sits with the ATO.”
Mr Davies said the Queensland Government had a similar opportunity to structure its ex-gratia payments for licence owners so that they would not constitute assessable income or a capital gain tax event.
“The payments to Queensland taxi and limousine licence owners were plainly inadequate in the first place, and if owners were to lose a third or more in tax to the Commonwealth, that inadequacy just becomes completely ridiculous.
“As the industry’s peak body, TCQ wants to seek a class ruling from the ATO on the lump sum payments to taxi licence owners. We don’t want the Queensland Government applying for that ruling because they are the ones who abandoned licence owners and caused most of the distress to licence values.
“Of course, if the Queensland Government wants to commit to paying the tax bill of licence owners if a class ruling went that way, that would be a game changer. However, that is the only basis on which the State Government should be meddling in the tax affairs of Queensland licence owners.”