Publication date: 21 Sep 99 |
Source: THE TAX INSTITUTE
The Government has missed a unique opportunity to reform Australia's Fringe Benefits Tax system by dismissing outright the Ralph Review's recommendations for changes to this complicated and costly piece of legislation, according to Taxation Institute of Australia President, Mr Gordon Cooper.
"Fringe Benefits Tax has been of paramount concern to taxation professionals since its inception in 1986," Mr Cooper said.
"The legislation has become a thorn in the side of employers and employees alike and we are extremely disappointed that the Government has ignored very reasonable recommendations put forward by John Ralph to improve the equity and reduce the compliance costs of the fringe benefits tax system," he said.
The recommendation contained in "A Tax System Redesigned" and supported by tax professionals would have improved the equity of the tax by taxing fringe benefits in the hands of employees. This would ensure that income received as fringe benefits by an employee would be taxed at the same personal marginal tax rate as any other form of employee remuneration. Employers would have continued to be responsible for the collection of the tax through the PAYE system.
In addition, recommendations in Ralph would have reduced compliance costs to business by removing entertainment and on-premises car parking from fringe benefits tax coverage.
"Removing Fringe Benefit Tax from the reform basket will impact on taxpayers as they are forced to continue to deal with a complicated, high compliance piece of legislation with no hope for improved equity and simplicity and after all, isn't that what this 'great adventure into tax reform' is all about?" Mr Cooper said.