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New tax crisis for PM

Publication date: 05 Apr 01 | Source: THE TAX INSTITUTE

The result according to Tax Institute President, Ms Alice McCleary, is that ordinary Australians are facing unwarranted penalties, in excess of 14 percent, for failing to meet impossible deadlines imposed by the new tax system.

"Innocent Australians and their tax advisors will be penalised as a result of the failure of the Government and the Tax Office to deliver a simple tax system," she said.

A Tax Institute survey of tax agents conducted last month revealed that as a result of additional tax reform workloads, they are between 6 to 8 weeks behind in their income tax return lodgement programs. Tax returns lodged outside the lodgement deadline incur late penalties. As agents now lodge the vast majority of tax returns, the potential penalty problem is massive.

The Tax Institute therefore wrote to the Prime Minister on March 30 calling for urgent action.

"The workload resulting from poorly designed complex law, abysmal implementation, faulty software, and staff shortages means there is no capacity to lodge returns. Imposing penalties is like beating a dead donkey – it will have no effect in getting the income tax returns lodged - members are stretched beyond their physical capacity to file them," says Ms McCleary. "There are many examples of Tax Institute members who have always met tax lodgement deadlines. One tax agent operating since 1975 has never had a late lodgement penalty until now."

Member Response 61 said "I estimate that I am about 4 weeks behind in my normal tax work and look like being unable to meet the lodgement program for the first time in over 30 years as a Tax Agent.

"Not able to meet its lodgement deadlines for the first time in as long as I can remember." said Member Response 81.

"The taxpaying community is being crushed by the assault of complex and flawed legislation," said Ms McCleary.

A six-week global extension for tax return lodgements has been sought by the Tax Institute.