The Tax Institute has called on the Federal Government to recommit to the fundamentally important area of trust tax reform after months of eerie silence and further delays.
According to Robert Jeremenko, Senior Tax Counsel at The Tax Institute, ongoing uncertainty around trust taxation is one of the top reform issues for tax professionals in Australia and the delay in implementing reforms is unacceptable.
"According to their own timeline, the Government had committed to release its policy design paper by May this year.
"Instead the process is already behind schedule creating greater uncertainty over a complex, cumbersome and critically out-of-date area of the tax system.
"Since the release of the initial Consultation Paper in November 2011, the reform has largely stalled to the detriment of a significant number of taxpayers dealing with ongoing complexity and uncertainty."
"In light of Treasury’s resource-constraints, it is disappointing to see the lack of focus on a reform that will assist taxpayers by reducing their compliance burden."
"The Tax Institute calls on the Federal Government to end the radio silence and show renewed commitment to this reform project by immediately releasing a revised timeline, thereby providing greater certainty to Australian tax professionals and bringing this critical area of taxation into the 21st Century," he said.
The findings in the recent Greenhatch case serve to again remind us of the overly-complex nature of the taxation on trusts.
"Such recent Court decisions have highlighted the ongoing compliance difficulties faced by the 600,000 trusts in Australia, many of which are used by charities, individuals and small to medium businesses. These compliance difficulties often have far-reaching and adverse implications for many Australians, clearly illustrating the urgent need for reform in this area."
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.
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