Last week saw the continuation of the very busy workload for many members in the lead-up to 30 June, with the rush to make trustee resolutions and clients seeking last minute tax advice on end of year financial decisions. Many members will have also closed out the books on their own business as of 30 June, providing a chance to take stock of the tough income year just gone by.
And so to the beginning of the next lodgement season; as in previous years, The Tax Institute will be working closely with both members and the ATO throughout Tax Time 2012 to ensure that any problems with systems and processes are brought to the ATO's attention as soon as possible.
Earlier last week The Tax Institute had the opportunity to meet with members of the Board of Taxation to discuss the upcoming Division 7A review. Members may recall that the Assistant Treasurer announced the review at The Tax Institute's Annual NSW Tax Forum in May this year.
With Division 7A being such a bugbear for tax professionals since its inception, combined with the recent actions by the ATO on unpaid present entitlements, it is high time to examine the effectiveness of Division 7A by engaging widely with the tax profession and learning from the experience the profession has had with these provisions.
We will continue our active engagement with the Board on the review and will be looking to members to contribute more of their first-hand experiences of operating with this law. We expect a discussion paper to publicly issue by September this year, but conversations are continuing in the lead-up to that paper.
State tax reform
Also last week The Tax Institute sat down with the Treasurer of the ACT to discuss his long-term tax reform plans including abolishing housing stamp duty and duty on insurance policies. Commercial land tax will also be abolished, with residential land tax being adjusted to reduce tax on properties below median price, to encourage investment in affordable rental accommodation. General rates will rise to make the reforms self-funding.
We discussed the opportunities presented by the ACT plan for engaging with its colleagues in the States on reform. It also provides a fillip for the Federal Government to show leadership on the issue of Commonwealth-State relations and set a national vision for tax reform.
Robert Jeremenko is Senior Tax Counsel of The Tax Institute.
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.