The year just gone was unusual in that it saw a new Commissioner and a new government, both of whom have shaken up the status quo. The new Commissioner has completely revamped the profession’s consultation arrangements with the ATO, terminating many longstanding committees and introducing a new process for conducting consultation. The new model is in its infancy and I anticipate that we will be testing and refining the new consultation arrangements during the first half of this year.
Senator Sinodinos also started his term with a bang by dealing swiftly with the 100+ announced but unenacted legislative amendments left over from the previous government. The abandonment of some of these measures was welcome, such as the proposed disallowance of tax deductions for self-education above $2,000. The Institute was prominent in opposing that measure. But some of the other measures that were abandoned were designed to cure legislative anomalies.
There is a danger that some taxpayers and their advisers who lodged tax returns on the assumption that the law would accord with measures previously announced will be caught out because those measures have been abandoned. The government has announced that it will protect those taxpayers through a further legislative amendment — yes, yet another announced but unenacted measure, this one designed to protect taxpayers disadvantaged by announced but unenacted measures!
The Institute will monitor these developments closely. Robert Jeremenko, Steve Westaway and I have already met with the Assistant Treasurer, who has indicated he is interested in hearing from us about any concerns the Institute may have in relation to the tax system. Please let us know if any of your clients are adversely affected by the abandonment of previously announced legislative changes.
As if these developments were not enough, in the second half of this year the government will be issuing a white paper setting out proposals for reforming the tax system. The Institute will be encouraging the government to provide a timetable for drafting the white paper and will respond to the white paper when it is published.
On top of these headline issues, we will continue to work for members who are affected at a day-to-day level by other matters. For example, the ATO overhauled its website last year, which led to considerable frustration for those using the site. The Institute repeatedly brought these issues to the attention of the ATO. The ATO’s approach to trusts has also generated considerable uncertainty for members. We will be encouraging the ATO to adopt sensible practices in its administration of the taxation of trusts.
All of us are looking forward to a very active year!
Michael Flynn CTA is President of the National Council at 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.