In just four weeks the federal government will unveil its 2010-2011 Budget. Before that happens, we are still expecting the release of the Henry report. Still no word on that front. Just yesterday the Assistant Treasurer, Nick Sherry, was delivering a keynote address to our 2010 Business Forum in Perth on tax reform but he refused to be drawn on an exact timeline for the release of the review. In his words, it remains “imminent.”
The release date aside, one thing is for certain: the next four weeks will be interesting to watch as the government gains momentum for Budget Night on May 11. The challenge will be for the government to adopt short term tax reforms that are aligned with a cautious approach to expenditure as it moves to return the Budget to surplus.
The good news is that the Australian economy is doing well, according to leading economists, and that means there is more scope for consideration of what I’m sure will be many recommendations contained in Dr Henry’s report.
And for those of you who are waiting to ‘judge’ the final verdict of Dr Henry’s review, just remember that contrary to what most people think, tax reform doesn’t necessarily involve cutting taxes (or imposing higher taxes, for that matter). What I will be looking for from the review are measures that are designed to simplify the tax system for the majority of individuals and businesses, so that everyday operations and compliance obligations are made easier.
What do you think? What criteria will you judge Dr Henry's review by?
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Fact: there will be changes that will effect all businesses and individuals. What i will be looking for is how they are to be implemented. As a tax agent the implementation of many of the ATO's "changes" and "simplifications" have come with an immense burden on my day to day running of business.
ReplyDeleteHon Nick Sherry says in his closing comments (at the Perth Business Forum) that “I am very aware that as tax professionals, you are concerned about the increasing complexity of tax arrangements and volume of tax law.”
ReplyDeleteI hope that he is also aware of the increasing cost of compliance – the vast number of acts such as Income Tax, FBT, GST, etc, etc, which pose a huge risk on companies to ensure that hey are doing the right thing and even with tax professionals in their midst, it’s a difficult task.
This is an ideal opportunity for the government to provide a less complex system, reduce the associated cost of compliance, and provide long term benefits to Australia that we are all hoping for. This will also hopefully free up time and resources of companies, so that staff are able to concentrate on more value add functions rather than only compliance activities.
I would also hope that decisions are not merely made because of looming elections, but are made for the greater (economic) good of Australia.
I'd like to know whether the Institute is aware of the catastrophe in the ATO surrounding the issuing of 2008/09 assessments and refunds. It is causing immense frustration and hardship to Tax Agents, some of whom would be members of the Institute. It is at times like these that members need the Institute to speak up, but I have heard nothing of any significance.
ReplyDeletePeter, thank you for your comment.
ReplyDeleteYes, I believe all tax agents – Institute members included – are painfully aware of the Australian Tax Office delays with the issue of assessments and refunds to taxpayers.
The Institute takes all matters that have adverse impacts on its membership very seriously. We have been closely involved in discussions with the ATO over the last few months and have been quite vocal about the frustrations of our members.
We have also reinforced to the Commissioner of Taxation the importance of the ATO being as open and transparent as possible as its works to resolve its processes. The ATO’s last update was issued on Friday 16 April and outlines facts and causes associated with the delays.
Today, Monday 19 April, the CEOs of the professional bodies will attend a briefing session by Tax Office Second Commissioner David Butler on the ATO’s planned remediation strategies. This will be followed by a detailed workshop between the ATO and the professional bodies on Friday 23 April in Canberra. At these meetings, the Institute will again reiterate the concerns of our members, which we continue to monitor.
You will also be interested to know that on Friday 16 April, the Assistant Treasurer announced an urgent review by the Inspector-General of Taxation into the ATO’s IT system. The Institute will also participate in this review.
Delayed ATO taxpayer refunds affect tax agents’ ability to earn income from the services they provide. The Institute understands this, and will continue to listen to our members and voice their concerns as the ATO works towards a resolution.
We will continue to provide updates to our members as things progress. In the meantime, if you have any specific issues you would like to raise, I invite you to email me at taxgroup@charteredaccountants.com.au.
Tony
ReplyDeleteThe first judgement of Henry is not good simply because of the delay in releasing the review and the constant speculation and so called leaks - all of which adds to the uncertainty.
Very poorly handled by the Government.