Tax advocate and senior tax trainer at TaxBanter, Robyn Jacobson talks to The Tax Institute, ahead of her panel discussion at The Tax Summit, on what the future holds for taxation practitioners in Australia. She reveals some of the key challenges ahead.
A thought leader looking to the future
Harnessing nearly 30 years of experience as an active member of the tax community, Robyn is a leading professional involved in the Victorian Professional Development Committee with The Tax Institute, the Victorian Tax Forum, Yarra Valley Tax Retreat, Noosa Tax Intensive and Private Business Tax Retreat organising committees, and is the immediate past Chair of CPA Australia’s Victorian Public Practice Committee.
Robyn is regularly involved in consultations with The Treasury and the ATO, with her focus on simplifying the complexity of tax for organisations, businesses and individuals. She has been recognised by the Women In Finance Awards 2019 as the Winner of Thought Leader of the Year. She reflects on being the Sole Director of her own training business, Cyntax Pty Ltd, before its merger with TaxBanter in 2011 as her one of her proudest career achievements to date.
She will be an integral part of The Tax Summit’s showcase interactive Q&A session, ‘Tax with 2020 Vision,’ exploring her outlook on tax reform alongside Professor Graeme Cooper of Taxation Law, University of Sydney, Ann-Maree Wolff Head of Tax at Rio Tinto and renowned current affairs journalist, Tony Jones, who will lead the discussion.
Top trending topics in tax for 2020
Tax with 2020 vision could still be a ‘little blurry’ across a number of pressing issues, with Robyn highlighting the most significant topics that are likely to impact Australian tax in the year ahead:
“More than 20 years after Division 7A was introduced into the tax law to address tax-free loans made by private companies to shareholders and their associates, SME practitioners continue to grapple with these complex provisions. The government announced reforms in 2016, following a review by the Board of Taxation, but two deferrals of the commencement date so far, and no sign of any draft legislation with the reforms proposed to commence from 1 July 2020, have resulted in ongoing uncertainty. The profession keenly awaits the release of details of the proposed reforms. Division 7A will be a key topic of focus throughout 2020, and you can learn more at our Division 7A speaker session at The Tax Summit.
“Issues within superannuation such as Superannuation Guarantee, Non-arm’s length income, the future of Limited resource borrowing arrangements and contribution caps continue to generate debate as practitioners deal with legislative changes and new ATO administrative approaches,” she adds.
Recent Legislative Changes
Robyn shares that recently enacted legislative changes affecting Deductions for vacant land and denying foreign residents the CGT main residence exemption contain complex provisions and exemptions which practitioners need to understand thoroughly to correctly advise their clients.
“This will no doubt generate further discussion throughout 2020,” she adds.
“This year, practitioners will face one of the biggest technological changes with MyGovID,” she explains. “The main concern with the implementation is the practical issues that arise from staff gaining access to confidential client data remotely on their digital device, in a potentially inappropriate manner and environment.”
ATO’s administrative powers
The ATO’s use of their administrative powers continues to impact the profession, as the ATO’s audit activity and use of big data increases. According to Robyn, this includes the ATO’s focus on reining in the significant level of outstanding small business tax debts and outstanding lodgments. Director penalty notices, garnishee notices, freezing orders and departure prohibition orders are just some of the tools the ATO has available to deal with outstanding tax debts.
“This is resulting in more practitioners dealing with disputes, reviews and audits, seeking legal advice, and assisting clients enter into payment arrangements,” she says.
Predictions of three biggest watershed moments in tax over the next decade
Over the decades, recurring talk on tax reform has included the perennial issue of ‘direct versus indirect taxation’, which has been a main focus of every major tax review.
As Robyn predicts, this will be the first of three biggest watershed moments to come, as indirect taxation issues continue to generate debate over the coming years.
“Indirect taxation includes whether the government should rely more heavily on income tax or indirect taxes such as GST; or whether corporate tax and personal tax should continue to be the dominant source of revenue for the government,” she says.
“The role of corporate taxation including the imputation system, striking the balance of tax rates between individuals and corporates, how trust income should be taxed, the future of the taxation of superannuation and how fringe benefits are taxed - will continue to be the source of endless debate.”
The second of these ‘watershed moments’ Robyn highlights, is to reconsider the real value of the 2009 Henry Tax Review, which was intended to inform and guide tax reform over the following 10-20 years.
“Little progress has been made if progress is measured by reference to the implementation of the Henry recommendations,” she stresses.
Thirdly, Robyn sees redesigning the tax law to resolve the complexity and inefficiency of provisions, that make it difficult to sustain a practical approach to comply, will also be high on the agenda. But there needs to be an appetite for reform; genuine reform, not annual tweaks and tinkering of provisions that don’t improve overall efficiencies in the economy.
“Governments regularly talk of simplification, but the design of the current tax law is far from ideal,” she adds. “Will the full re-write of the ITAA 1936 into the ITAA 1997 ever be completed? That’s a perennial question.”
Keeping up with the pace of change
A surge in technological advances, regulatory change, and big data are giving rise to more challenging issues in an already complex environment. According to Robyn, changes such as myGovID will present new challenges to practitioners, as they adopt changes in technology and adapt their business and practice processes to ensure they comply.
“With the extensive changes to legislation (both enacted and pending), court cases, and the relentless but necessary ATO administrative guidance, senior experienced practitioners have conveyed to me their struggle to keep up with the pace and volume of tax changes,” Robyn explains. “There is also increased compliance activity being undertaken by the Tax Practitioners Board, with the final report from the recent review of the TPB yet to be released.
“Many practitioners feel overwhelmed by the volume and complexity of tax changes, but continue to dedicate themselves to their chosen profession and their clients.”
Resources for remote practitioners
Gaining access to technical and other necessary resources for practitioners who live or practice remotely remains a challenge, Robyn notes. This is amplified as the demand for quality staff, the need to identify the best training and professional development resources, plus ensure their lodgment program does not fall behind, remain pressing workflow challenges.
“All the while, it is important to remember that smaller practitioners often lack the support and network of the larger firms,” she adds. “While looking after clients who run businesses, they themselves are running their own business, which demands their attention regarding best practice (and now generally cloud-based) tax return preparation and practice management software, their own compliance obligations, as well as cash flow and business management.”
Excitement around tax for 2020
According to Robyn, tax reform has come a long way since the early days of the Labor reforms of the mid-1980s, to the Howard reforms, which transformed business taxation and introduced the GST in 2000. With so much imminent change, Robyn shares her ongoing enthusiasm about the future of tax as she anticipates many exciting opportunities on the horizon.
“As we sit at the start of a new decade, 2020 provides us with an opportunity to pause, reflect, and consider how we should best proceed with tax policy, to ensure the system is sufficiently robust to carry us through the next 30 years,” Robyn says.
Much uncertainty around political instability in the past few years has settled, and the Government is seemingly in a relatively more ‘comfortable position’ for the first time in nearly 15 years, according to Robyn. Moving forward, this means it’s now time to focus on building exceptional expertise and constructive ideas, and refocus collective efforts on improving the system.
“It is important that the Government, namely the Ministry, the Treasury and the ATO, continue to work with the profession, in the spirit of true collaboration,” Robyn says. “Personally, I have always enjoyed the challenge of working in the tax profession and striving to make a difference in helping to shape tax policy and administration. I look forward to continuing to communicate the abundance of complex changes to practitioners in a practical and engaging way while being an impartial commentator on the developments in tax through social media and other forums.”
What to look most forward to at the Tax Summit
With nearly three decades of experience in the tax profession, Robyn praises The Tax Summit as “The National Convention on steroids!” - providing an invaluable opportunity for intense learning and networking.
“The Tax Summit will be an exceptional event, delivering the very best in quality topics, speakers and technical materials. This is the National Convention on steroids! More than 90 speakers over more than 60 sessions across 5 streams over 3 days ... what a smörgåsbord of tax content to feast on.”
“This takes the State-based forums and the National Convention to a whole new level and will set a new standard for tax conferences in the future. I expect smaller conferences may draw on some of the great initiatives that have sprung from The Tax Summit.”
The selection of speakers has been curated specifically to the interest of their audience as well as their expertise, Robyn highlights, and there will be a wide range of topics to appeal to every practitioner.
“Delegates will benefit from improving their knowledge through the delivery of relevant, practical topics, and the networking opportunities to mix with peers and mentors will be second to none,” she adds.
Robyn is particularly excited to share her insights on tax reform, in her panel session at The Tax Summit, in what is anticipated to be an extremely hearty and robust discussion.
“This will be a rare opportunity for the tax community to come together to share knowledge, impart experience and mentor emerging leaders. Imagine a room full of more than 1,000 people passionate about tax! I’m excited to reacquaint myself with many familiar folks in the profession as well as meet many new faces.
Get ready to see Tax with 2020 Vision
Don’t miss your chance to see The Tax Summit’s showcase interactive Q&A session, ‘Tax with 2020 Vision,’ exploring Robyn’s outlook on tax reform alongside Professor Graeme Cooper of Taxation Law, University of Sydney, Ann-Maree Wolff Head of Tax at Rio Tinto and renowned current affairs journalist, Tony Jones, who will lead the discussion.
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