One of the key aspects of the Commissioner’s role in the tax system is applying and explaining the law to taxpayers. Generally, the law can be interpreted consistently with the policy intent. However, in some cases the interpretation of the law (when applying ordinary statutory interpretation principles) may not be in accordance with the policy intent. This can take up Commissioner and taxpayer resources in outcomes that are inconsistent with both parties’ practice and/or expectations.
The Commissioner currently has limited administrative flexibility to deal with such issues. The Commissioner cannot ignore or not apply the law as interpreted by her. This is because, as a matter of constitutional law, only Parliament has the ability to impose (or suspend) taxes. Instead, a legislative amendment can be sought to remedy the issue, this may not necessarily avoid the Commissioner and taxpayers having to commit resources to the issue.