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Positive step towards simplifying tax time

Publication date: 11 May 10 | Source: THE TAX INSTITUTE

The 2010-11 Federal Budget takes a positive step towards simplifying tax time for millions of Australians.

The Taxation Institute of Australia strongly supports the Budget announcement that the Government will make it easier to fill out tax returns by offering taxpayers a standard tax deduction and calls for the Government to continue along the path of simplification.

President David Williams said the optional standard deduction of $500 in lieu of claiming work-related expenses and the cost of managing tax affairs from 1 July 2012, increasing to $1,000 from 1 July 2013, is a long overdue measure that's good for compliance and reduces costs by making the system simpler.

"The Government’s adoption of this Henry Review recommendation was widely expected and is a great step towards fairer and simpler tax returns for millions of Australians," Mr Williams said.

Mr Williams also welcomed the Government's announcement of a new tax incentive that halves the tax paid on up to $1,000 of interest income from a range of savings products from 1 July 2011.

"Encouraging people to save more is a positive measure," Mr Williams said.

"This measure will hopefully lead to an increase in deposits, which will also reduce the reliance of Australian financial institutions on foreign borrowings, which is good news for the stability of our globally connected economy."

Another positive Budget measure is the clarification of the tax treatment of earnout arrangements used to structure the sale of a business or asset to manage uncertainty about the value of the business or asset.

"The Taxation Institute has called for this welcome clarification and strongly believes that the application date should be brought forward from the date announced in the Budget."

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Media Contacts:
Robert Jeremenko, Senior Tax Counsel - Taxation Institute of Australia on 0468 987 300
Craig Regan - Lighthouse Communications (0408) 448 527