12 August 2004

Rates Rebellion spokesman refuses to pay GST on ARC rates.

Rates Rebellion spokesman David Thornton has refused to pay GST on his ARC rates in response to ARC chairwoman Gwen Bull's letter to a ratepayer earlier this year saying that rates are not a charge for services received.

In her letter Mrs Bull wrote;-

Rates are often regarded as a charge for services received, It is important to note that they are not. A recent decision of the Court of Appeal stated; "..it is implicit in the scheme of the legislation that a rating system in its diversity remains primarily a taxation system and not a system inherently based on the principle of user pays".

In a letter to Mrs Bull, sent with his rates cheque, David Thornton wrote,

"I cannot accept that the ARC should add a Goods & Services Tax on top of my council rates.

"You clearly state that rates are NOT a charge for services received - therefore I am enclosing my cheque for ARC rates with the GST part deducted."

Mr Thornton said today "Parliament has just refused to remove GST from rates because it claimed rates were a charge for services received. This is clearly in conflict with the Court of Appeal ruling referred to by Mrs Bull. "If the chairwoman of the country's biggest rating authority says that rates are not a charge for services why are we being charged GST. "In view of the recent parliamentary decision I believe it may take a legal test case to finally remove GST from council rates"

ENDS

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