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Labor promise is positive but it's time to get serious

Publication date: 05 Aug 10 | Source: THE TAX INSTITUTE

A promised advisory board to shape Australian Tax Office corporate governance has some positives but was peripheral to the real business of reform, the country's leading taxation professional body said today.

Taxation Institute Senior Counsel Robert Jeremenko said a Tax System Advisory Board was an important recommendation of the Henry Tax Review and a good addition to business and taxpayer input into Tax Office decision making and culture.

"But the fact that an administrative reform is taking centre place in tax in this election campaign highlights that both major parties need to get serious about proper tax reform," Mr Jeremenko said.

"The Taxation Institute calls on the incoming Government to look at the fundamentals of tax reform, not just the way the system is administered.

"The Henry Report provided a good starting point for tax reform but it's time for the major parties to treat tax reform seriously and make a commitment to a meaningful plan.

“This means committing to changes that make the system fairer, more equitable and simpler.”

Mr Jeremenko said the Institute was concerned that the Advisory Board would be funded from existing Tax Office resources.

"We caution that this proposal must not result in the Tax Office taking its eye off the main game of tax administration," he said.

A related announcement by the Australian Labor Party about recommitting to a principles-based approach to tax design is positive, but when enacted the principles need to contain sufficient detail to enable the law to be efficiently interpreted and applied.

Proposals to continue work towards a single modern Income Tax law, as well as reshaping the Board of Taxation to allow it to initiate its own reviews into the operation of tax policies and laws are positive steps.

"These were further recommendations of the Henry Tax Review and we are pleased to see proposals to bring them to life.

Mr Jeremenko said the Institute's pre-election offer to host a tax debate between the major parties still stood, even with Treasurer Wayne Swan and Shadow Treasurer Joe Hockey facing off at the National Press Club on Monday.

"We have received an acknowledgement only from the Liberal Party and no response from Labor," he said. "We'd be happy with them both to lay out some broad principles at the Press Club and then be scrutinised on more tax detail at a second debate."

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For more information:
Robert Jeremenko, Senior Tax Counsel, Taxation Institute of Australia, T: 02 8223 0011, M 0468 987 300
Craig Regan, Lighthouse Communications, 02 9692 8811, 0408 448 527;
John Hanrahan, 02 9692 8811, 0411 212 965