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Bureaucrats shortsighted in Business Activity Statements debacle

Publication date: 12 Nov 99 | Source: THE TAX INSTITUTE

The Taxation Institute of Australia is appalled by the proposal that unlicensed 'cowboys' may be able prepare crucial tax information such as Business Activity Statements.Business Activity Statements (BAS) is an eight page statement which must be completed quarterly by small businesses and monthly by large businesses. Report in the BAS are calculations in respect of GST, PAYG income tax instalments and withholding tax, deferred company instalments, fringe benefits tax instalments and other indirect tax reporting.

"This proposal runs totally contrary to recommendations of the National Review of Standards for the Tax Profession," said Taxation Institute of Australia President, Mr Gordon Cooper.

"These proposed preparers may be unqualified, raising questions about the guarantee of standards. Further, as there appears to be no requirement for these preparers to be registered, it is not clear how the ATO will be able to impose sanctions if these preparers fail to satisfy their obligations to the ATO or clients?" said Mr Cooper.

"This will actually create additional work for tax agents as the BAS in effect constitutes a mirror image of the tax return prepared. On professional liability grounds tax agents would be reluctant to rely on the accuracy of the BAS data prepared by an unqualified person. As a result they would have to repeat the work adding to compliance costs."

"Having two different prepares could create inconsistencies between the BAS and the tax return prepared, creating tax collection shortfalls for the ATO and underpayment penalties for taxpayers," he said.

"The preparation of the BAS could be complex and difficult and when people pay for professional help they should be confidant that those people are qualified, properly trained and subject to appropriate regulation."