Publication date: 07 Apr 00 |
Source: THE TAX INSTITUTE
"The introduction of the so-called Option 2 or the Tax Value Method of determining taxable income should be delayed until the dust settles on other tax reform changes and its benefits can be properly evaluated", the Taxation Institute of Australia said today."The Tax Value Method fundamentally changes the existing approach to calculating taxable income and is unproven", said Ray Conwell, President of the Taxation Institute.
"Given all of the other changes occurring over the next 2 years, now is not the time to be removing the anchor of our tax system by introducing such a radical new approach", he said. "No other country in the world has adopted this system. Australian taxpayers are entitled to the certainty of retaining the fundamentals of the existing system while having to cope with all the other changes proposed by Ralph and the Government."
The Taxation Institute of Australia has proposed that the Tax Value Method be used for some of the Ralph changes, namely leasing and financial transactions, but that its more general application be deferred until at least 2003 when it can be evaluated in light of this experience.
"Taxpayers, tax advisers and the Tax Office are all currently struggling to handle implementation of the Goods and Services Tax, the Australian Business Number, Pay As You Go and the other changes due to come in on 1 July 2000. Moreover, from 1 July 2001 a raft of other changes, including entity taxation and consolidations, will be introduced. The Federal Government must recognise that enough is enough", says Ray Conwell.
The Taxation Institute urges the Treasurer to reject the recommendations of the Chairman of the Business Coalition for Tax Reform to rush headlong into the unproven Option 2. Instead the Treasurer should put an end to the debate and opt for retention of the existing fundamentals to taxable income calculation.