08/06/1999 - 22:00

GST deal the stuff of compliance nightmares

08/06/1999 - 22:00

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IT REALLY is the stuff of which nightmares are made.The GST deal Meg Lees and John Howard presented to the people is limited in detail but it would seem the problems faced by nations such as Ireland will be replicated here.The exemption of food from

GST deal the stuff of compliance nightmares
IT REALLY is the stuff of which nightmares are made.

The GST deal Meg Lees and John Howard presented to the people is limited in detail but it would seem the problems faced by nations such as Ireland will be replicated here.

The exemption of food from the GST package poses no end of problems for the lawmakers.

The definitional issues that arise can make this whole area something of a nightmare for the administrators.

There is still a paucity of information about how the exemptions will apply but we have seen examples of the anomalies that may arise.

The question of the purchase of a pre-prepared kebab in a store as opposed to buying the uncooked version has been well documented in other media.

Similar issues abound in literature coming out of England.

For example, a court there recently decided a toffee apple was a fruit and not confectionery because the predominant ingredient was fruit.

Leave aside the interpretational difficulties this decision poses and look at the equity of the package.

If we exempt unprocessed food from the tax then we get the ridiculous situation of having fresh crayfish exempt and processed fish fingers being subject to it.

Has Senator Lees no idea that the people most likely to buy fish fingers are the low-income earners?

So when Senator Lees sees herself as the champion of the downtrodden, she needs to think through her decision more carefully.

The obvious path for her to have taken was to have a GST apply to all goods and services and then look at compensating low-income earners to a greater extent than proposed.

The up shot of the compromise is that we will create a bevy of very highly paid lawyers as they battle to come to terms with the exemptions that apply.

The totally laughable and unworkable recommendation that we incorporate the recipe for bread into our tax act almost suggests we could well get to the stage where every home in Australia should buy a copy of the Tax Act just so they have a recipe book.

The suggestion from Victorian Premier, Jeff Kennett, that we have two rates of GST, 5 per cent on all food items and 10 per cent on all other items has some merit.

The interpretational issue of what constitutes food will still rage.

The only way we resolve this issue is to have no exemptions whatsoever and to compensate our low and fixed income earners to a greater extent than suggested to date.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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