The small business community and tax experts are enthusiastically welcoming the prospect of tax reform under a Coalition government, and are looking forward to the implementation of a 1.5% cut to the corporate tax rate. But there are still uncertainties that need to be cleared up – including how the new government intends to scrap the increased threshold for the instant asset write-off scheme, the loss-carry back scheme and other small business tax concessions. "We're quite excited about the white paper process," says Deepti Patton, tax counsel at the Tax Institute, regarding the tax reform plan announced by Tony Abbott during the campaign. "There has been a need for a long time to take the public along with business groups, to argue for tax reform and to show broader tax reforms are in the national interest. "It will be good to have that debate." Tony Abbott has announced that within three years, the Coalition will produce a white paper that will investigate how to simplify the tax system – including a look at the GST and how it operates. Tax experts, including CPA Australia head of policy Paul Drum, say the prospect of such a review is "exciting". But Lance Cunningham, national tax director at BDO, told SmartCompany this morning the first term of the Coalition government won't bring reform, but rather "tinkering around the edges". "Unfortunately, we're not going to see a lot of tax changes until after this term. Assuming they win a second term, we'll see what comes out after that," he says. "But we're of the view the type of tax changes seen in the previous government, which have been ad hoc and firing at the hip, are not the way to go. "We're hoping the incoming government will change that." Paul Drum also told SmartCompany the corporate tax rate cut, which Abbott has promised will be implemented within the first term, is a welcome change – but the prospect of broader reform is more enticing. "As a result, the next three years are not going to be a period of great change in tax." However, although the Coalition has promised great change under the tax system, some concessions will disappear – and the industry is calling for as much certainty as possible. The Coalition said it would scrap the increased threshold for the asset write-off program, dropping from $6,500 to $5,000, and that it would remove the loss carry back scheme. Increased depreciation schedules for motor vehicles will also be reduced. All up, the Coalition hopes to save over $4 billion from the measures. But Paul Drum says in order for the new government to instill confidence in business, it needs to give as much detail as possible. "From a business perspective," he says, "businesses will be keen to know details, including the start dates for those concessions. "Now is the time to provide those details." Deepti Patton says the Coalition should provide details on how the delay to the super guarantee increases would begin, although praised the promise to include more private sector commentary in operating the Treasury.
The new commissioner of the Australian Taxation Office will outline several ways he intends to make the nation's tax authority more open and willing to experiment with new ways of dispute resolution, in his first major speech in the role.
Federal Opposition Leader Tony Abbott says the Coalition will only release its policy costings after the government releases theirs, after the Prime Minister flagged a number of cost-saving measures to be considered ahead of the budget.
Business owners have once again been warmed of the importance of making sure they don't exceed superannuation caps, following the decision of a judge to uphold a $70,000 tax bill for a director of bookstore chain Dymocks.
Labor’s carbon pricing plan received mixed reaction from the small business sector, with industry groups condemning the economic impact but tax experts welcoming the details.
A tax expert says unregistered bookkeepers could face fines or suspension if they fail to acquire mandatory insurance by July 1, but many are unaware of the new requirements.
The Federal Government’s highly-anticipated financial planning package has been met with a mixed response, with planners concerned the changes could increase costs for consumers.
Tax experts have welcomed the Federal Government’s decision to launch a review of the trust and tax laws that affect more than a half million small businesses.
The Australian Taxation Office might be cracking down on high-profile tax evasion cases, but experts say SMEs are still being treated leniently and that approach will continue until the economy hits full speed.