Tax Authority Gets More Power to Charge Interest on Unpaid Taxes

The Senate has approved amendments to the Income Tax Act, ratifying the past actions of the tax authorities in charging interest on unpaid taxes under Section 67 (5) of the Act.
The amendments also seek to expressly authorise the tax authority to charge interest on unpaid tax deemed to be assessed under Section 67 (5) of the Act, and to indemnify the tax authorities, who had responsibility for collecting the interest charged from legal action.
Attorney General and Minister of Justice, Senator the Hon. Dorothy Lightbourne, who piloted the Bill, explained that its purpose is to correct an anomaly, where the Act authorises the charging of interest on unpaid tax which is the subject of an assessment signed by the commissioner, but does not expressly authorise the charging of interest on unpaid tax which is the subject of a deemed assessment.
“The rationale behind the charging of interest in both cases is that, it could not be the intention of Parliament to charge interest on unpaid tax which is assessed by the Commissioner, but not in the case where there is a voluntary declaration by the taxpayer that the tax is unpaid,” Senator Lightbourne said.
She said that the Bill seeks to bring certainty and clarity to the Income tax Act, and this is in keeping with the overall mandate of the current tax reform, which is aimed at enhancing revenue collection through an equitable tax system.
Opposition Senator, K.D. Knight, stated that members of the Opposition had no objection to the amendments. The Bill was passed without any amendments.