In a media release dated 19 January 2015, the Assistant Treasurer, Josh Frydenberg, announced the release of the Inspector-General of Taxation's Review into the Australian Taxation Office's (ATO) administration of valuation matters.
The Assistant Treasurer said that the Inspector-General has identified inherent difficulties associated with the nature and associated costs of valuations.
Given these issues, the Inspector-General has made nine recommendations to the ATO aimed at taking a more practical and transparent approach to assessing taxpayer valuations and developing administrative safe harbours.
Mr Frydenberg said that the Government welcomes these recommendations, including the ATO’s commitment to develop a standard template for instructing valuers, which contribute to cutting red tape and reducing compliance costs for taxpayers.
The Inspector-General has also made three recommendations for the Government’s consideration, which include:
- consideration of ways to limit the need for valuations when developing tax law, including shortcuts or safe harbors as an alternative to full valuations;
- consultation on ways to reduce reliance on valuations to access the small business capital gains tax concessions; and
- tapering the eligibility criteria for tax concessions.
Mr Frydenberg said that the Government will give full consideration to these recommendations, and noted that the upcoming Tax White Paper will be an opportunity to provide a longer-term, considered approach to tax reform.