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Revenue Services Administration (Amendment) Act 2007

Commencement: Not yet in force

LAWS OF TONGA

REVENUE SERVICES ADMINISTRATION (AMENDMENT) ACT 2007
Act No. 9 of 2007

AN ACT TO AMEND THE REVENUE SERVICES ADMINISTRATION ACT 2002

I assent,
George Tupou V
14 August 2007

Commencement [not yet in force]

BE IT ENACTED by the King and the Legislative Assembly of Tonga in the Legislature of the Kingdom as follows —

1.

(1) This Act may be cited as the Revenue Services Administration (Amendment) Act 2007.

(2) This Act shall come into force on a date to be proclaimed by His Majesty in Council which shall be the same day as the Income Tax Act 2007.
Section 2 of the Principal Act shall be amended as follows —

2.

The Revenue Services Administration Act 2002, as amended, is in this Act referred to as the Principal Act.

3.

Section 2 of the Principal Act shall be amended as follows –

(a) in the definition of "income tax" by deleting "(Cap. 68)" and substituting "2007";

(b) inserting after the definition of "liquidator" the following new
definition —

"Registrar" means the Registrar of Tax Agents appointed under
this Act;";

(c) in the definition of "representative", by —

(i) deleting in paragraph (k) "(Cap. 68)" and substituting "2007";

(ii) deleting the semi colon at the end paragraph (k) and substituting a comma; and

(iii) inserting at the end of the definition the following words —

"and includes any person declared to be a representative under section 27";"

(d) in the definition of "revenue law" in paragraph (a), by

(i) deleting "(Cap. 68)" and substituting "2007"; and

(ii) deleting "the Sales Tax Act (Cap. 69),";

(e) in the definition of "reviewable decision", by —

(i) deleting the "or" after paragraph (b) and re-inserting it after the semicolon in paragraph (c); and

(ii) inserting after paragraph (c), the following new paragraph —

"(d) a decision by the Registrar referred to in section 61C(7), 61D(5), 61E(2), 61E(4), or 61F(2);";

(f) in the definition of "tax", by

(i) deleting the words "withholding tax imposed under section 70(2) of the Income Tax Act (Cap. 68)" in paragraph (a) and substituting the words "the minimum income tax, presumptive income tax, and an instalment of income tax under section 91 of the Income Tax Act 2007";

(ii) deleting paragraph (b) and substituting the following —

"(b) an amount of tax withheld from a payment under Division 4 of Part 8 of the Income Tax Act 2007;"; and

(iii) deleting paragraphs (c) and (d) and re-numbering paragraphs (e) and (f) as paragraphs (c) and (d);

(g) in the definition of "taxation assessment" in subsection (1), by —

(i) deleting in paragraph (a) the words "by the Chief Commissioner of Revenue" and the words "sales tax,";

(ii) inserting "or" after the semicolon in paragraph (a); and

(iii) deleting paragraphs (b) and (c), renumbering paragraph (d) as (c) and substituting the following paragraph —

"(b) a determination of the amount owing by a non-resident ship owner or charterer under section 73(1)(b) of the Income Tax Act 2007;";

(h) in the definition of "taxation decision", by —

(i) deleting in paragraph (d) "(3)" and substituting "(2)";

(ii) deleting the word "or" at the end of paragraph (n); and

(iii) inserting after paragraph (o), the following new paragraphs —

"(p) a decision by the Chief Commissioner under the Income Tax Act 2007 to refuse to certify an institution, body, or trust as conducting activities exclusively for charitable purposes;

(q) a decision of the Chief Commissioner under the Income Tax Act 2007 to require a person to give security for the payment of tax; or

(r) a decision by the Chief Commissioner under the Income Tax Act 2007 on an application for a refund;";

(i) in the definition of "taxpayer", by —

(i) deleting paragraphs (a) to (c) and substituting the following —

"(a) a taxpayer for the purposes of the Income Tax Act 2007;

(b) a person required to withhold tax from a payment under Division 4 of Part 8 of the Income Tax Act 2007;";

(ii) deleting paragraph (d); and

(iii) re-numbering paragraphs (e), (f) and (g) as paragraphs (c), (d) and (e);

(j) in the definition of "tax period", by deleting paragraphs (a) through (d) and substituting —

"(a) in the case of income tax —

(i) for the purposes of income tax imposed under section 5 of the Income Tax Act 2007;

(ii) for the purposes of income tax imposed under section 6 of the Income Tax Act 2007, the period to which the tax relates;

(iii) for the purposes of the presumptive income tax imposed under section 8 of the Income Tax Act 2007, the quarter; or

(iv) for the purposes of instalments of income tax under section 91 of the Income Tax act 2007, the period to which the instalment relates;

(b) in the case of tax withheld under Division 4 of Part 8 of the Income Tax Act 2007, the period to which the withholding relates; or

(c) in the case of consumption tax, the consumption tax period of the taxpayer;"; and

(k) in the definition of "tax return", by —

(i) deleting paragraphs (a) through (f) and substituting the following paragraphs —

"(a) an income tax return under section 68 of the Income Tax Act 2007;

(b) a return required to be lodged by a master of a ship under section 73(1)(a) of the Income Tax Act 2007;

(c) a return required to be lodged by the owner or charterer of an aircraft under section 74(1) of the Income Tax Act 2007;

(d) a withholding tax statement under section 86 of the Income Tax Act 2007;

(e) a presumptive income tax return under section 92(1) of the Income Tax Act 2007; or"; and

(ii) re-numbering paragraph (g) as paragraph (f).

4.

Section 19 of the Principal Act shall be amended as follows —

(a) in subsection (1)(a), by deleting "2(1)(c), (e), (f), or (g)" and substituting "2(1)(d) (in relation to withholding from employment income only) or (f)"; and

(b) in subsection (1)(b), by —

(i) deleting "sales tax,"; and

(ii) deleting "tax deducted from a payment of salary or wages under section 50 of the Income Tax Act (Cap. 68)" and substituting "tax withheld from a payment of employment income under section 76 of the Income Tax Act 2007".
5

Section 22 of the Principal Act shall be amended by deleting subsection (4).

6

Section 30 of the Principal Act shall be amended in subsection (3)(a) by deleting "deducted from a payment of salary or wages under section 50 of the Income Tax Act (Cap. 68) or tax deducted from a payment of withholding income under section 71 of the Income Tax Act (Cap. 68)" and substituting "withheld from a payment under Division 4 of Part 8 of the Income Tax Act 2007".

7

Section 32 of the Principal Act shall be amended in subsection (4) by deleting "deducted from a payment of salary or wages under section 50 of the Income Tax Act (Cap. 68) or tax deducted from a payment of withholding income under section 71 of the Income Tax Act (Cap. 68)" and substituting "withheld from a payment under Division 4 of Part 8 of the Income Tax Act 2007"

8

The Principal Act is amended by inserting the following new Division III in Part XII —

"DIVISION III

61A Registrar of Tax Agents

(1) There shall be appointed a Registrar of Tax Agents.

(2) Subject to subsection (3), the Registrar shall be a person with significant tax knowledge and experience appointed by the Chief Commissioner.

(3) The following persons shall not be appointed as the Registrar —

(a) a taxation officer;

(b) a person who has, under any revenue law, been convicted of an offence or has been liable for a penalty; or

(c) a person who is an undischarged bankrupt.

(4) The Registrar shall hold office for five years and is eligible for reappointment.

(5) The Chief Commissioner shall terminate, by notice in writing, the appointment of a person as Registrar if the person —

(a) becomes engaged as a taxation officer;

(b) becomes an undischarged bankrupt;

(c) is unable to perform the duties of office or engages in misconduct; or

(d) resigns by notice, in writing, to the Chief Commissioner.

(6) No action or suit shall be brought or maintained against a person who is or has been the Registrar for any non-feasance or misfeasance in connection with the Registrar’s duties of office.

61B Application for registration of tax agents

(1) A person or partnership may apply to the Registrar for registration as a tax agent.

(2) An application for registration as a tax agent under subsection (1) shall be in the prescribed form and accompanied by the prescribed fee.

61C Registration of tax agents

(1) If an applicant under section 61B is a natural person, the Registrar shall register the applicant if satisfied that —

(a) the applicant is a fit and proper person to prepare tax returns and objections to taxation decisions, and transact business with the Chief Commissioner under the revenue laws on behalf of taxpayers; and

(b) the applicant is not an undischarged bankrupt.

(2) If an applicant under section 61B is a partnership, the Registrar shall register the applicant if satisfied that —

(a) the partner specified in the application as the nominee of the partnership is a fit and proper person to prepare tax returns and objections to taxation decisions, and transact business with the Chief Commissioner under the revenue laws on behalf of taxpayers;

(b) every partner in the partnership is of good fame, integrity, and character or, if a partner is a company, every director, manager, or other executive officer of the company is of good fame, integrity, and character; and

(c) no partner is an undischarged bankrupt.

(3) If an applicant under section 61B is a company, the Registrar shall register the applicant if satisfied that —

(a) the employee of the company specified in the application as the nominee of the company is a fit and proper person to prepare tax returns and objections to taxation decisions, and transact business with the Chief Commissioner under the revenue laws on behalf of taxpayers;

(b) every director, manager, or other executive officer of the company is of good fame, integrity, and character; and

(c) no director, manager, or other executive officer is an undischarged bankrupt.

(4) The registration of a tax agent shall remain in force for 12 months from the date of registration.

(5) If a partnership or company is registered as a tax agent, the partner or employee referred to in subsection (2)(a) or (3)(a) shall be registered by the Registrar as a nominee of the tax agent from the date of registration of the partnership or company as tax agent.

(6) The registration of a nominee of a tax agent under subsection (5) shall remain in force until the registration is cancelled under section 61E(3).

(7) The Registrar shall provide an applicant under section 61B with notice, in writing, of the decision on the application.

61D Renewal of Registration

(1) A tax agent may apply to the Registrar for the renewal of the tax agent’s registration.

(2) An application under subsection (1) shall be —

(a) in the prescribed form and accompanied by the prescribed fee; and

(b) delivered to the Registrar within 21 days of the date of expiry of the tax agent’s registration or such later date as the Registrar may allow.

(3) The Registrar shall renew the registration of a tax agent who has applied under subsection (1) if the tax agent continues to satisfy the conditions for registration in section 61C.

(4) The renewal of a tax agent’s registration shall remain in force for 12 months from the date the existing registration expires.

(5) The Registrar shall provide an applicant under subsection (1) with notice, in writing, of the decision on the application.

61E Tax agents that are partnerships and companies

(1) A partnership or company registered as a tax agent may, by application the prescribed form accompanied by the prescribed fee, request the Registrar to register a partner of the partnership or an employee of the company as an additional or substituted nominee for the purposes of this Division and the Registrar shall so register the person if satisfied that the person is a fit and proper person to prepare income tax returns and objections to taxation decisions, and transact business with the Chief Commissioner under the revenue laws on behalf of taxpayers and is not an undischarged bankrupt.

(2) The Registrar shall provide an applicant under subsection (1) with notice, in writing, of the decision on the application.

(3) The Registrar shall cancel the registration of a partner in a partnership employee of a company as a nominee of a partnership or company registered as a tax agent if —

(a) the Registrar is satisfied that the partner or employee is no longer a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers;

(b) the partner or employee becomes an undischarged bankrupt;

(c) in the case of a tax agent that is a partnership, the partner ceases to be a partner in the partnership or the partnership, by notice in writing to the Registrar, applies for cancellation of the registration of the partner; or

(d) in the case of a tax agent that is a company, the employee ceases to be employed by the company or the company, by notice in writing to the Registrar, applies for cancellation of the registration of the employee.

(4) The Registrar shall give notice, in writing, to a partnership or company of a decision to cancel the registration of a nominee of the partnership or company and, if the registration is cancelled, the cancellation shall take effect from the date specified in the notice.

(5) A partnership that is a tax agent shall notify the Registrar, in writing, if —

(a) there is a change in the composition of the partnership;

(b) a partner becomes an undischarged bankrupt; or

(c) the partnership is going to be dissolved.

(6) Notification —

(a) under subsection (5)(a) or (b), shall be made within seven days after the change in composition or the partner becoming an undischarged bankrupt; or

(b) under subsection (5)(c), shall be made within seven days before the dissolution of the partnership.

(7) A company that is a tax agent shall notify the Registrar, in writing, if —

(a) a registered nominee ceases to be an employee of the company;

(b) a person becomes a director, manager, or other executive officer of the company;

(c) a director, manager, or other executive officer of the company becomes an undischarged bankrupt; or

(d) the company is going into liquidation.

(8) Notification —

(a) under subsection (7)(a), (b), or (c), shall be made within seven days after the employee ceased to be employed, the person become a director, manager or other executive officer, or the director, manager or other executive officer become an undischarged bankrupt; or

(b) under subsection (7)(d), shall be made within seven days before the company goes into liquidation.

(9) A partnership that fails to give notice under subsection (5) or a company that fails to give notice under subsection (7) commits an offence and shall be liable upon conviction to a fine not exceeding $10,000.

61F Cancellation of Registration

(1) The Registrar shall cancel the registration of a tax agent if —

(a) a tax return prepared and delivered by the tax agent is false in any material particular, unless the tax agent establishes to the satisfaction of the Registrar that this was not due to any wilful or negligent conduct of the tax agent;

(b) the tax agent ceases to satisfy the conditions for registration in section 61C;

(c) the registration of the tax agent expires and the agent has not delivered an application for renewal of the registration under section 61D;

(d) the tax agent has ceased to carry on business as a tax agent; or

(e) in the case of a partnership or company —

(i) the company or partnership ceases to have a nominee registered under section 61E; or

(ii) the company or partnership ceases to exist.

(2) The Registrar shall give notice, in writing, of a decision to cancel the registration of a tax agent.

(3) Subject to subsection (4), the cancellation of a registration takes effect 60 days after the tax agent has been served with notice of the cancellation.

(4) If a tax agent served with notice of the cancellation of the tax agent’s registration applies to the Tax Tribunal for review of the decision, the cancellation takes effect in accordance with subsection (3) only if confirmed by the Chief Commissioner.

61G Only Tax Agents to Accept Fees and Advertise as Tax Agent

(1) Subject to subsection (2), no person other than a tax agent can demand or receive any fee for or in relation to, or represent that for a fee the person will assist in —

(a) the preparation of a tax return or an objection to a taxation decision;

(b) the transaction of any business with the Chief Commissioner on behalf of any person in respect of the person’s rights or obligations under a revenue law.

(2) Subsection (1) shall not apply to —

(a) a law practitioner performing legal work in relation to a revenue law; or

(b) an employee of a taxpayer or tax agent acting in the ordinary course of employment.

(3) A person who contravenes this section is guilty of an offence and shall be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years, or both."

9.

Notwithstanding anything in this Act, the Principal Act shall continue to apply as if this Act were not enacted —

(a) for the purposes of the Income Tax Act (Cap. 68), to any fiscal year to which that Act applies; and

(b) for the purposes of the Sales Tax Act (Cap. 69), to any sales made before the Consumption Tax Act 2003 came into force.