20 May 11 On the Budget "fix" for excess contributions tax
MEMBER 77 writes:
"I dispute the statement in last week's TAXVINE - see 2011 TAXVINE No 18 (13 May 2011) - that the introduction of some relief from excess superannuation contributions tax is a significant win for The Tax Institute. I believe that it is a significant loss. The excess contributions tax is a discriminatory and unjust penalty. It is a penalty imposed at a very high rate on human errors. A fair tax system should allow errors to be corrected with no benefit to either the Revenue or the taxpayer. The refusal to make this retrospective highlights the unjustness of this penalty."
THE TAX INSTITUTE’S SENIOR TAX COUNSEL, ROBERT JEREMENKO, RESPONDS:
"The Tax Institute has advocated long and hard for changes to the excess contributions tax, and we have welcomed the Government's announcement. It will result in the vast majority of inadvertent first-time breaches of the concessional caps no longer facing an ECT assessment. The difficult political and economic climate surrounding this year's Budget cannot be ignored. The Government has committed to returning the Budget to surplus in 2012-13, and could have simply done nothing on ECT.
The Government has indicated that there will be an opportunity to contribute to the development of the new law. The Tax Institute will be actively involved in this and we look forward to our members' contributions to this reform process."