Australian Tax Forum
Australian Tax Forum is a prestigious quarterly journal with the objective of providing discussion on issues in tax policy, law and reform amongst tax professionals. It is an essential reference source for understanding and contributing to the development of taxation systems worldwide. Australian Tax Forum is aimed at those who want to influence the future development of tax policy. It is an important journal for tax policy makers, academics and libraries.
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Articles from the current issue:
01 May 2014
An aspect of taxation law that receives little attention is the taxation of payments made by mining companies to Indigenous owners in return for the exploration and mining rights to their traditional lands. The current position in Australia is far from clear. Ultimately, this is because Australian taxation law concepts are entirely foreign and unsuitable in the context of communally held inalienable aboriginal/Native title. Moreover, it is contended that Australian taxation law does not promote justice and reconciliation but rather in this context operates as a blunt tool. To tax Indigenous communities as a result of acts that negatively impact on their traditional ownership is incongruous.
On 18 May 2010 the Government announced the commencement of a national consultation on the tax treatment of Native title. The then Assistant Treasurer, Senator Nick Sherry recognised the need for “greater clarity and increased certainty for native title holders on how the tax system and native title interact.” The then Attorney General, Robert McClelland, noted the need to “improve the management of benefits obtained through native title agreements and ensuring those agreements provide sustainable benefits for current and future communities.” This coincided with the release by the government of Native Title, Indigenous Economic Development and Tax, to guide the national consultation. The outcome of the consultation process was the Tax Laws Amendment (2012 Measures No 6) Act 2013 (Cth) which renders certain payments to, or for the benefit of, Indigenous persons exempt from income tax. This paper critically evaluates the new provisions. It suggests that while the legislation may at first glance appear simple its focus is too narrow and its implementation will be complex. It ultimately concludes that while this is a positive step forward, the proposal does not go far enough. It considers an alternative model, an Indigenous Community/Economic Development Corporation (‘IEDC’), that would more effectively ensure all aboriginal/Native title payments to, or for the benefit of, Indigenous persons are exempt from income tax. This is appropriate given the history of uncompensated extinguishment of aboriginal title in Australia. The law should promote the ability of Indigenous communities to optimise the financial benefits stemming from aboriginal/Native title agreements.
Complexity, compliance costs and non compliance with VAT by small and medium enterprises in Bangladesh: Is there a relationship? Add to cart
01 May 2014
Similar to many developing nations, Bangladesh’s small and medium sector enterprises (SMEs) constitute some 90% of all businesses and play an important role in the country’s economic growth and employment.1 This study investigates the nature and extent of the relationships between the complexity of Bangladesh’s Value Added Tax (VAT) legislation, the costs of compliance with VAT in Bangladesh, and non-compliance (either intentional or unintentional) with the VAT legislation by Bangladeshi SMEs. These results could be important as it appears that SMEs are under-represented in terms of their contribution to Bangladesh’s VAT revenue collection, which if other foreign studies2 are relevant could be due in part to compliance costs. The current study is the first to empirically examine the relationships between the complexity of VAT legislation, compliance costs and noncompliance for SMEs in Bangladesh context. The study involved firstly a series of focus group interviews involving different types of SMEs taxpayers in Bangladesh. This was then followed by survey through a purposive sample of SMEs taxpayers in Bangladesh.
The results suggest that a majority of the compliant SMEs taxpayers listed complexity in VAT law and compliance costs as the two important factors influencing VAT noncompliance in SMEs. On the other hand, non-compliant taxpayers emphasised more about the positive relationship between taxpayers and VAT officials for compliant behaviour. The likelihood of audits, penalties and sanctions were found to have less effect on VAT non-compliance for non-compliant taxpayers. In comparison, such monitoring and penalties would apparently improve compliant behaviour by compliant taxpayers. The findings of this research have practical policy implications, in that they can assist policy makers and administrators in their understanding of the potential interrelationships between legislative and regulatory complexity, the costs of complying with VAT legislation, and non-compliance with VAT legislation by SMEs. Having a robust and functioning VAT system is seen as an important attribute for a developing economy, so these findings may be important not only for Bangladesh, but also similar developing economies.
Tangled up in tape: The continuing tax compliance plight of the small and medium enterprise business sector Add to cart
01 May 2014
Firms in the small and medium enterprise (SME) sector have to contend not just with the burden of tax. They also have to comply with obligations imposed by the tax system. Studies invariably show such tax compliance costs to be high and regressive. This article reports on a recent large-scale Australian study which confirm previous research and also suggests that tax compliance costs for SMEs are not diminishing over time, despite tax administrative reform and technological advances designed to reduce such costs. The outcomes of the study have significant implications for businesses in the SME sector, their advisers, administrators working with revenue authorities and policy-makers at the governmental level.
Reforming vehicle taxes on new car purchases can reduce road transport emissions – Ex post evidence Add to cart
01 May 2014
Australia is falling behind the international trend towards low carbon transport to reduce greenhouse gas (GHG) emissions. For instance, in 2012 the Australian Government forecasts that road transport emissions will continue to increase to 2020 and then slow to 2030 because of higher oil prices and the introduction of mandatory CO2 emissions standards. The forecast assumes vehicle efficiencies of petrol and diesel engines will improve, and there will be a gradual shift to alternative technologies. However, in 2007 the European Union found that while advances in vehicle technology had delivered most of the carbon reductions, these advances were offset by new cars that had become significantly more powerful, larger, and heavier. This is the case in Australia.
The paper shows how Australia can accelerate the uptake of low carbon technology through reforming existing vehicle taxes into an environmental related tax. The reform will require basing the tax on CO2 emissions from previously being based on the vehicles technical characteristics such as cylinder capacity, engine size and fuel type. The literature supports the reform of vehicle taxes into an environmental tax, which was found to be a powerful instrument in influencing the purchase decisions of consumers.1 Specifically, the paper examines the literature and reviews the ex post evidence on the successful reform of vehicles taxes.
In the case study of Ireland, it was found that the reformed vehicle taxes based on CO2 emissions provided a strong price signal, and consumer response was greater than anticipated. As a result, Irelands ambitious targets in reducing its GHG emissions were met.2 The paper provides evidence to Australia’s policy makers, consultants and car manufacturers that reforming existing vehicle taxes into an environmental related tax is an effective measure in transitioning Australia into a low carbon transport and reducing road transport emissions.
Tax aware investment management by public offer superannuation funds in Australia: Attitudes, practices and expectations Add to cart
01 May 2014
The Superannuation Industry Supervision Act 1993 (Cth) (the SIS Act) has been amended from 1 July 2013 to require the trustees of Australian superannuation funds to have regard and consider the taxation consequences of their investment strategy. In spite of the literature strongly supporting the benefits of taking tax into account when investing (Tax Aware Investment Management, TAIM) by funds, the extent to which negative perceptions existed about TAIM were unclear. This study was directed at exploring the attitudes, practices and expectations of Chief Investment Officers (CIOs) of public offer superannuation funds in respect of TAIM and in the context of the recent reform. Semi-structured interviews were conducted with 22 CIOs. It was found that they rejected all negative reasons for not utilising TAIM. More importantly, the CIOs were supportive of TAIM and felt that any views to the contrary were not theirs. The CIOs did already practice limited TAIM methods with respect to Capital Gains Tax and imputation credits, and they expected little change in the way that they manage their funds from 1 July 2013.