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Publication date: 14 Feb 13 | Source: THE TAX INSTITUTE

14 February 2013: Tax professionals welcome the acknowledgement that the current approach to self-assessment of tax liability imposes many of the expected obligations, but offers few of the expected benefits, The Tax Institute said today.

According to Steve Westaway, President of The Tax Institute, members of The Tax Institute have long raised concerns with the increasing cost and complexity of quasi self-assessment in an environment of extensive tax law change, increasing reporting obligations and decreasing certainty.

"The Inspector-General’s long awaited report into the self-assessment system contains thirty-three welcome recommendations, most of which have been accepted.

“These recommen dations are a step in the right direction of alleviating the ever-increasing workload borne by taxpayers and professionals in achieving an acceptable degree of certainty in relation to their tax affairs. 

“However the benefits of these good intentions will only begin to flow to taxpayers and professionals once work commences on implementation via a timely and directed process,” he said.

Mr Westaway noted that, in order to ensure success, such a process should be prioritised and well-resourced by both the ATO and Treasury.

“Particularly, the concurrent design of tax laws and ATO guidance via a tri-partite consultation process involving Treasury, the ATO and private sector participants should lead to greater transparency and ensure easier to apply tax laws the first time around. 

“The ATO’s role of guiding taxpayers through the muddy waters that are our complex tax laws is essential to the proper functioning of our now quasi self-assessment system.

“Recommendations to ensure real-time, targeted ATO advice, synchronise ATO practices with existing business operations and provide appropriate protection from penalties for taxpayers trying to do the right thing should also assist in striking the right balance,” he said.

Mr Westaway noted that, significantly, an increase in the reasonably arguable position threshold to $100,000 will provide welcome relief from compliance costs and greater certainty for many small to medium enterprise taxpayers.

“A recommendation to allow the ATO to make factual assumptions when considering ruling requests with scope for taxpayer response should lead to the provision of more timely advice and greater accountability. 

“We look forward to working with the Government in the coming months to implement the accepted recommendations,” he concluded.



  • Robert Jeremenko, Senior Tax Counsel, The Tax Institute, 0468 987 300