The Tax Institute welcomes simplicity and certainty in tax for small businesses

SYDNEY, 3 March 2021:The Tax Institute welcomes the call for a simplified and more efficient tax system for our small business community, proposed ina report released today by the Australian Small Business and Family Enterprise Ombudsman, A tax system that works for small business.

“The Tax Institute has been a leading voice for tax reform and we are closely aligned with the Ombudsman in our vision for a simple, efficient and equitable tax system that will propel Australia’s small business community forward,” said Scott Treatt, CTA, General Manager Tax Policy and Advocacy at The Tax Institute.

The Tax Institute thanks the Ombudsman’s office for its open and collaborative discussions in the formulation of its final recommendations.

“In this report, the Ombudsman is calling for simplicity and certainty for small businesses, which is something The Tax Institute supports wholeheartedly and which we have independently called for during The Tax Summit: Project Reform.”

The report pinpointed the complexity of small business tax compliance as a major risk.

“No one benefits from a tax system where compliance is overly difficult and complex. Not the community relying on efficient taxes to fund public projects, not the regulator which then pours resources into reviewing cases, and certainly not the small business owners and their advisors trying to navigate their obligations,” Scott said.

Broadly, The Tax Institute supports the recommendations made by the Ombudsman. The tax system may benefit from the broader application of some of the recommendations, not simply limiting them to small business. Recommendation 20, regarding the freezing of garnishment orders, is one such example, which, subject to appropriate safeguards, would benefit the entire system.

Another particularly timely recommendation is to introduce an accreditation scheme for tax agents who have proven compliance for the past 3 years. Income tax returns prepared by a qualifying registered tax or BAS agent would have their potential ATO review period reduced to 12 months.^[1]

Scott said that this recommendation from the Ombudsman is a sensible counterbalance to those made in Treasury’s recent Independent Review of the Tax Practitioners Board, where it recommended the Tax Agent Services Regulations 2009 be amended to enable the TPB to publish more detailed reasons for tax practitioner sanctions, on the publicly available TPB Register.^[2]

“If we are expecting transparency around tax practitioners who are not up to standard, then we should also have transparency around the practitioners who are consistently behaving appropriately in regard to regulators and clients,” Scott said.

“If the ATO has the data available to keep a detailed register of practitioner behaviour which results in sanctions, then why shouldn’t those on the other side of the coin – practitioners who consistently do the right thing – be recognised?”

“If there is anything small businesses need after the economic upset caused by COVID-19, it’s stability. Making it easy for them to find and engage an accredited tax specialist who is part of a professional body and behaves the right way would be a big help towards that.”

The Tax Institute is available for commentary on any of the recommendations made in the Ombudsman’s report.

 

ENDS

For more information, please contact:

Kelly Emmerton – Media Contact, The Tax Institute

kellyemmerton@taxinstitute.com.au  

02 8223 0029      04 10 108 681

 

The Tax Institute is the leading forum for the tax community in Australia. Our reach includes membership of 12,000 tax professionals from commerce and industry, academia, government and public practice and 40,000 Australian business leaders, government employees and students. We are committed to representing our members, shaping the future of the tax profession and continuous improvement of the tax system for the benefit of all, through the advancement of knowledge, member support and advocacy. Read more at taxinstitute.com.au

 

[1] A tax system that works for small business, February 2021. Australian Small Business and Family Enterprise Ombudsman.

Recommendation 11:

“Where, the review period is reduced to 12-months following lodgement, where that agent has proven compliance over 3 consecutive years with:

1. Full membership of a recognised professional association with a Professional Code of Conduct and compliance with continuing professional education requirements;
2. No record of substantiated client complaints to either the Tax Practitioners Board or their professional association;
3. Full compliance with their own taxation lodgement and payment obligations; and
4. Achievement of tax agent lodgement program benchmarks annually.”

 

[2] Independent Review of the Tax Practitioners Board, 31 October 2019. Treasury.

Recommendation 6.3:

“The Review recommends that the Tax Agent Services Regulations 2009 be amended to enable the TPB to publish more detailed reasons for tax practitioner sanctions, including terminations, on the TPB Register (which is publicly available). See also Recommendation 8.1.”

Recommendation 8.1:

“The Review recommends that:

1. Details of tax practitioners that are currently included on the TPB Register should be expanded. This could include publishing a wider range of information, decisions and outcomes on the TPB Register.
2. A register of unregistered tax practitioners be made available. This register would include those entities that receive a notice by the TPB to ‘cease and desist’ providing tax agent services for a fee and publication of details relating to renewal application rejections (in certain circumstances, such as not being fit and proper).
3. The time limits on how long certain information appears on the Register be removed.”