Australian Tax Forum

Australian Tax Forum Vol 28 (3) 2014
Outside of Australia
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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.

Articles from the current issue:

  • The abandoned education cap policy: Public participation in tax reform consultation Add to cart

    01 Mar 2015

    This article examines public participation in tax reform in Australia using an analysis of the publically available submissions made in response to the Treasury discussion paper, “Reform to deductions for education expenses”. The discussion paper was released by Treasury in May 2013 in relation to the $2,000 cap for education expense deductions. The introduction of the proposed reform was subsequently deferred and then abandoned by succeeding governments, but not before an unprecedented campaign was launched by a collective alliance of taxpayers and their representative organisations. This study uses regulation theories to frame the examination of the public response to the discussion paper and the explicit issues raised by interest groups in their formal submissions. More specifically, the research question considers: how do the Australian public participate in the tax consultation process? We also consider the appropriateness of the questions included in the discussion paper and the consultation process more broadly. Findings indicate support for private interest theory and also highlight a lack of transparency and feedback in this Treasury consultation.

  • Not so guaranteed: Superannuation guarantee and Australian small businesses Add to cart

    01 Mar 2015

    When Australia’s compulsory superannuation system was introduced in 1992, the name given to it, the superannuation guarantee, suggested that the payment of contributions by employers would be “guaranteed”. Reporting on compliance with superannuation guarantee by small-to-medium enterprises (SMEs), however, paints a vastly different picture — especially for small businesses. Also, the pseudo status of some small businesses as “contractors” (as opposed to employees) of larger businesses may be undermining their potential own entitlement to superannuation guarantee. Such non-compliance draws into question how certain the superannuation guarantee system is for employees of these enterprises, and thereby undermining this important pillar of Australia’s retirement system. Non-compliance by the SME sector is of concern given that it accounts for nearly 50% of private employment in Australia and performs important sub-contracting roles.

    This article will examine data on the compliance by small business employers with their superannuation guarantee obligations that indicate this is far from the case. The article will examine the reasons behind non-compliance by small business employers and the related issue of non-recovery of outstanding entitlements by the Australian Taxation Office.

    The article will then consider recommendations for reform of the current system to reduce the incidence of non-compliance by employers and to increase the likelihood of recovery of outstanding entitlements. The article will conclude by setting out areas worthy of further research and by arguing that reform is required to ensure that superannuation guarantee contributions are “guaranteed” for small business employees and operators.

  • The costs of compliance and associated benefits for small and medium enterprises in New Zealand: Some recent findings Add to cart

    01 Mar 2015

    This study reports the results of an investigation of the tax compliance cost burden for New Zealand small and medium enterprises (SMEs). It is one part of a larger international project (across five countries), which is evaluating and comparing tax compliance costs affecting SMEs. This study differentiates tax compliance activities from core accounting activities in order to identify the managerial benefits of tax compliance. It also investigates whether various New Zealand SME tax concessions are perceived to be achieving their objective of relieving the tax compliance burden for SMEs.

  • Back to the future and beyond Add to cart

    01 Mar 2015

    Australia’s rules for taxing benefits under employee share schemes in Div 83A of the Income Tax Assessment Act 1997 have been subject to much criticism, particularly by start-up companies and the venture capital industry. The Government under its new Industry Innovation and Competitiveness Agenda proposes to reform the rules for taxing such benefits from 1 July 2015.

    This article examines how the current rules in Div 83A operate and analyses how the Government’s proposed reforms are intended to change the way in which benefits under ESSs will be taxed. The article compares the policy rationale that underpins both the current and proposed regimes and focuses on how the current and proposed rules affect start-up companies.

  • Will cars go green in the ACT? A case study of the reformed vehicle stamp duty Add to cart

    01 Mar 2015

    In the year to December 2013, emissions from Australia’s transport sector increased by 53.5% compared to 1990 levels. The domestic transport sector now accounts for over 70% of liquid fuels consumed in this country,1 with passenger vehicles being the largest source of emission in this sector. Currently, the Australian Government has no fiscal instruments for mandatory fuel efficiency or carbon emission targets to reduce road transport emissions. Part 1 of the two-part series provided ex-post evidence that reforming vehicle purchase taxes/stamp duty differentiated on the basis of CO2 emissions was an effective measure to significantly reduce road transport emissions. In 2009, the Council of Australian Governments (COAG) recommended that vehicles purchase taxes be reformed on the basis of new vehicles’ “environmental performance”, and proposed the Australian Capital Territory’s (ACT’s) vehicle purchase tax/stamp duty as one model for this approach. However, the 2010 Henry Report rejected COAG’s recommendation.

    This article revisits the COAG’s recommendations and provides an analysis for Australia’s policy makers on whether the tax design and price signal of ACT’s vehicle purchase tax provides a model to be adopted by the rest of Australia, or whether an alternative instrument is recommended. The literature review suggests that to achieve significant reductions in average CO2 emissions from new light vehicles will depend on the choice of tax design, a strong upfront price signal, level of tax differential, public acceptance, and the interaction of other complementary tax policy measures.

    The article will assist policy makers in designing tax policy measures for the proposed Energy White Paper in 2015. In turn, this proposal will meet the objectives outlined in the Issues Paper, that is, to encourage a behavioural change in buyers that could lead to their choosing fuel-efficient, lowcarbon emitting new vehicles, as well as to help address the barriers and challenges to reforming vehicle purchase taxes/stamp duty.

  • Has the Charities Act 2013 changed the common law concept of charitable “public benefit” and, if so, how? Add to cart

    01 Mar 2015

    In 2013, the Charities Act 2013 (Cth) was enacted and it came into effect on 1 January 2014. This is the first time that there has been an enactment of a statutory definition of the legal concept of “charity” in Australia. The definition is important for many areas of personal and commercial life, however one of the most significant, at least from a legal point of view, is how this definition operates in the context of Australian taxation law. This is particularly relevant in view of the fact that charities are exempt from income tax and subject to many other tax concessions at federal, state and local government level. Under Australian common law, a charitable entity was required to have a charitable purpose and be of benefit to the public.

    This article introduces the statutory definition and how it confirms the common law definition of charity and charitable purpose in certain instances, but also amends and expands these concepts. This discussion is provided as a context for the analysis of how the issue of public benefit has been dealt with under the statute. The article concludes with an analysis of how the Act has amended the application of the public benefit test to recipients of payments in respect of native title and traditional Indigenous lands.

  • Applying the Delphi method as a research technique in tax law and policy Add to cart

    01 Mar 2015

    This article examines the Delphi method as a tool for legal research that can be used to facilitate transparent and informative policy-making in a variety of fields including tax policy. It points to strengths and limitations of the technique based on the findings of the Delphi study conducted to assist in the assessment of fiscal and more general market-based instruments (referred to in this article as carbon pricing instruments) that could be used to tackle climate change in Australia. Whether the Delphi method is utilised in empirical or theoretical legal research or in legal and policy decision-making, this article demonstrates the strength of the technique in providing transparent and justified results, which in turn reinforces the utility of the method as a legal research and/or decision-making tool.