Publication date: 10 May 05 |
Source: THE TAX INSTITUTE
"The Treasurer, Mr Costello, in claiming that tonight's Budget "is framed for the future", has finally grasped the opportunity to remove the superannuation surcharge" said John de Wijn QC, the President of the Taxation Institute.
The Taxation Institute of Australia has strongly advocated the removal of this surcharge for a number of years. The superannuation surcharge tax was:
- inefficient; and
- imposed high compliance costs.
"We also applaud the changes to allow deductibility over five years for business capital expenditure, not elsewhere recognised under the tax law (blackhole expenditure), as a positive outcome" added Mr de Wijn.
While the tax cuts are welcome as a means of addressing bracket creep, the Taxation Institute looks to Government to adopt a medium to long term policy of aligning the top marginal rate with the company rate.
"Failure to address the alignment of rates over the medium to long term is an opportunity lost" he said.
"The Budget is an encouraging step in restoring some equity to the tax system. Tax cuts in this year's Budget deliver overdue savings and incentives and the overdue removal of the superannuation surcharge will restore equity and efficiency to the superannuation tax regime. Unfortunately, the Budget does little to tackle compliance costs for all taxpayers" Mr de Wijn said.