The Taxpayer Editorials

The ability of interested stakeholders to participate in the development of new tax laws and the oversight of key aspects of the operation of the Tax Office is vitally important.

The year ahead, which already looks challenging, will commence with a blatant disregard of the rule of law following the Government announcements in November 2011 that amending legislation will be introduced early in 2012 with retrospective effect from 1 July 2002.

The importance of trusts in the Australian tax system has been well documented, as have the deficiencies of Division 6 ITAA36 which taxes trust income either in the hands of the trustee or trust beneficiaries.

One of the most contentious compliance strategies recently adopted by the Commissioner of Taxation has been the use of small business benchmarks as a basis for amending taxpayer assessments.

Timing in life can count for so much. Statistics indicate that, during 2006 and 2007, a substantial number of people in the age range of the late 50's to early 60's retired from the workforce.

So, the tax forum has come and gone. There do not appear to be any significant ‘big picture’ strategic initiatives forthcoming however a number of the more narrowly focused specific proposals offered by participants warrant active consideration. It is important that the forum does not end up being seen as congruent with what Shakespeare wrote of: Much Ado About Nothing.

The wheels of change in the tax world grind ever so slowly. Some of the pre-tax forum information which has been strategically leaked over recent weeks indicates that a proposal to adopt a ‘loss carry-back’ system will receive serious consideration.

The Tax Forum is scheduled for October 2011 and, as previously noted in this column, the goods and services tax (GST) remains firmly off the agenda. The federal treasurer, Wayne Swan, has re-confirmed in rather strident terms in recent days that this is the government position. This decision is at best, curious, and perhaps better described as inexplicable.

When professional services which have been to a significant extent self-regulated become the subject of legislation, it is likely that the introduction and ‘bedding down' of the legislation will take time and require extensive consultation. This was evident with the introduction of the Tax Agent Services legislation during the 2009 year. The Tax Practitioners Board is still engaged in the lengthy process of developing the regulatory framework which underpins those laws.

Experienced participants in the tax industry would be aware of the need for constant vigilance, even where a pronouncement from the Commissioner of Taxation may appear benign.