Publication date: 15 Apr 04 |
Source: THE TAX INSTITUTE
Neil Earle, President of the Taxation Institute of Australia welcomed the Commissioner's announcement in respect of the extension to lodge family trust elections (FTEs) and interposed entity elections (IEEs).
"Having raised the issue two years ago at the ATO's National Tax Liaison Group and actively pursued with the Commissioner and Government, the Taxation Institute believes that the announcement is a victory for open consultation and gives recognition to the difficulties faced by tax practitioners during the hectic tax reform period", he said.
The FTE rules are unduly onerous, giving rise to large assessments (in circumstances where the correct amount of tax is paid) merely due to an administrative oversight such as failing to tick a box in a tax return.
Mr Earle noted that "Such drop dead provisions have no place in a self assessment system and as such, are fundamentally flawed, requiring immediate legislative reform".
"Although the administrative announcement does address all our immediate concerns, it does not provide a long term solution", he said.
"The announcement is representative of an appropriate administrative response for over coming the problems that arise where new administrative procedures come into operation at a time when major tax change is occurring for example at the height of preparation for the impending GST."
As with lodgement issues, account issues and penalty issues that arose from the GST overload, the Commissioner's approach has moved over time (with considerable encouragement) to overcome these problems through the proper exercise of administrative discretion.