Tax Institute Australia Senior Tax Counsel Report 22 March 2013
22 March 2013
Posted by: SAIT Technical
By Robert Jeremenko CTA
At last week’s Tax Institute National Convention, much of the discussion and
technical output was focussed on the multitude of tax issues in the SME
As politicians love to say, small business is the backbone of
the Australian economy, responsible for approximately half of all private sector
employment of the Australian workforce.
However, as demonstrated by the raft of tax issues raised and discussed at
National Convention, the SME sector continues to be strangled by excessively
complicated tax laws which are themselves littered with cumbersome ‘integrity
provisions’. We remain concerned with this complexity and continue to advocate
for the need to consider the unique investment, business and funding
considerations that arise in the SME sector when writing tax laws.
To this end, we recently made a submission to the Productivity Commission with respect to
their inquiry into "Regulator engagement with small business”.
In our submission we highlighted the need to:
- consider the impact of ATO practices and
- consider the effectiveness of tax measures
intended to benefit small business; and
- maintain momentum on simplifying complex tax
laws (such as Division 7A, taxation of trust income provisions in Division 6 and
the personal services income rules).
In addition to the above, we call for an examination of creating a separate
entity for small business, that is, an entity into which existing structures can
be rolled over, allowing for the benefits of discretionary trusts (such as
streaming and the CGT discount) and/or retention of profits. Such an entity will
corral many currently available tax advantages into one entity that can be
administered more simply and effectively by taxpayers, tax agents and the ATO
We look forward to continuing our engagement on these issues in
the months to come.