Uncertainty, instability and inaction: not the name of the latest trio to have taken the music scene by storm, but unfortunately these are becoming hallmarks of the current Federal Government.
All taxpayers require certainty in the identification and scope of tax laws that frame both their obligations and their liabilities.
Such certainty is essential to the proper functioning of our tax system for a variety of reasons, including the need to allow:
- taxpayers to self-regulate behaviour in order to minimise tax risk;
- the fostering of voluntary and informed compliance with tax laws;
- taxpayers to make investment decisions and strike commercial bargains with certainty as to the tax cost resulting from the relevant transaction;
- corporate taxpayers to make informed dividend policy decisions; and
- listed companies to produce timely financial statements that accurately reflect their tax expense.
The more our political leaders play politics, the less they are able to focus on the main game of governing. The length of the current list of outstanding tax changes is still causing significant uncertainty within the taxpayer community and may be distorting investment, expenditure and dividend policy decisions. The Government committed to legislate the unenacted measures last year, but we are still left with close to 20 measures that have not made it into the statute books.
Similarly, the Tax White Paper process is being constantly delayed, which makes it harder and harder for tough policy ideas to be debated over a time period that does not rush the community through the conversation on the need for tax reforms. After all, we are approximately 18 months out from the next Federal Election.
Robert Jeremenko CTA