Terms of engagement

This month, our president Michael Flynn discusses the Institute’s engagement with stakeholders, including the government and, more importantly, our members.

The Tax Institute regularly provides submissions to the ATO and to the government about tax laws and the tax system. Our main strength lies in our members’ practical experience of the implementation of tax laws. But we are also invited to make submissions to the government in relation to high-level reforms of the tax system.

One issue that has been raised with me recently by two of our members is whether the Institute should make submissions on tax reform issues that lie outside our primary areas of expertise. The argument against making such submissions is that, to be meaningful, the submissions need to consider the benefits of the proposed law changes for particular groups of taxpayers, the cost to the Budget of giving up tax revenue, and other macroeconomic consequences that lie beyond The Tax Institute’s field of expertise. If the Institute’s submissions fail to consider these issues, we risk harming our credibility. The argument in favour of providing submissions on high-level tax reforms is that, although we may not be able to provide economic analysis, we can still suggest alternative pathways to reform and highlight advantages and disadvantages that are within our expertise to identify.

A related issue is that, on occasion, we may conclude that a particular measure that is opposed by some of our members would improve the tax system. The most memorable example was The Tax Institute’s support many years ago for a proposal to dispense with tax returns for individuals with simple affairs. At the time, this prompted some consternation from a number of members whose practices depended on the preparation of paper tax returns. It now appears likely that the government will remove the requirement for individuals with simple affairs to lodge any return.

The ATO is currently consulting with the tax profession about how to move towards a “low touch/no touch” tax system for individual taxpayers, particularly for those with simpler income tax affairs. The Institute is participating in that consultation. I do not anticipate that there will be any consternation from our members — in the age of mobiles, apps and electronic funds payment, the proposed changes are inevitable.

Nevertheless, the question remains: what role does The Tax Institute play in the debate about high-level tax reform?

Find out in my next post.

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.

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