Published on 01 Jul 06
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
Taxation concessions for employees to fund their retirement almost exclusively come from the tax preferences given to superannuation funds. Yet small business owners can utilise the tax concessions of superannuation funds on identical terms to employees and at the same time have very generous tax concessions for gains on disposal of their business, which gains are also used for retirement funding.
In addition to that, small business owners are preferred in terms of tax concessions for funding their retirement through their ability to use otherwise dedicated retirement funds in their business, a better ability to share tax concessions with spouses and enhanced tax deferral from a realisation basis of taxation on gains made on disposal of their business.
These differences in taxation of retirement funding breach the principles of horizontal equity and efficiency without any apparent reasonable basis.
These differences are present in the existing system and will persist in the new superannuation taxation environment proposed to commence from July 2007.
Current at 08 July 2014
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