If you joined me in thinking the Federal Government had shied away from any commitment to serious tax reform a week ago, you probably shared my enthusiasm on Tuesday night when it did an about-face in its Budget announcement.
The 2010-2011 Federal Budget, which the government labelled a ‘no-frills’ affair, was indeed no fiscal revolution. It did, however, mark the first ‘real’ step towards the kind of tax reform the country – or at least us tax professionals – were waiting for following the release of the Henry tax review.
I’m talking about the announcement of a standard $500 tax deduction and a simplified personal tax return process that will benefit around five million Australians.
Simplified individual tax returns are a good thing. Why? Not only will a simpler system relieve many Australians of the chore of wading through more than 200 pages of the annual tax pack, but it will also provide an opportunity for accountants and tax agents to focus more of their efforts on helping clients with truly complex tax affairs.
At the end of the day, accountants provide strategic tax and business advice, and the more the tax system allows time for them to do that, the better.
There were, of course, other measures announced in the Budget too. Have a look at the Institute’s response and the report we put together with Thomson Reuters on the Chartered Accountants website.
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