Publication date: 05 Apr 13 |
Source: THE TAX INSTITUTE
5 April 2013: The Government's acknowledgement of the long-held concerns of tax professionals in today's announcement of reforms to the tax treatment of excess concessional superannuation contributions has been welcomed by The Tax Institute.
“The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws so that inadvertent breaches of the contributions caps are not unfairly penalised,” said Steve Westaway, President of The Tax Institute.
“The current system is extremely and unnecessarily punitive. The proposed reforms will prevent most well-meaning taxpayers from being caught in the crossfire.
“Allowing voluntary withdrawals of excess concessional contributions and taxing the excess at the marginal rate will alleviate the current harsh consequences,” he said.
Mr Westaway also commented that the Government’s changes to lift the contributions cap for Australians approaching retirement will bolster balances that may be too low to provide adequately for retirement.
“Additional capacity to contribute at the age and stage of life at which taxpayers have necessary savings will improve sustainability of the superannuation system.
“While the Governments’ stepping back from the promised increase in the cap to $50,000 is disappointing, the removal of the restriction to taxpayers with balances less than $500,000 is sensible.
“While some of these changes are welcome, sustainability and equity in the system can only result from a long-term, holistic plan.
“The Tax Institute reiterates that when Governments tinker with the superannuation system it risks harming people's confidence in the system and in putting their hard-earned money aside to save for their retirement,” he concluded.
- Robert Jeremenko, Senior Tax Counsel, The Tax Institute, 0468 987 300