The Federal Government should consider implementing an optional tax return policy according to a survey of local business people conducted by the Institute of Chartered Accountants at its annual Business Forum in Perth.
The Federal Government should consider implementing an optional tax return policy according to a survey of local business people conducted by the Institute of Chartered Accountants at its annual Business Forum in Perth.
The survey revealed that 71 per cent of respondents believe that tax returns should be optional for taxpayers who have very simple tax affairs.
nstitute of Chartered Accountants, Perth general manager Con Abbott said the results reflected that complicated tax returns, required from every tax payer even when they are an employee with simple tax affairs, were an unnecessary burden on the community.
"An industry has been built around the completion of tax returns, which does not offer any benefit to tax payers," he said.
He also said optional tax returns should be encouraged in Australia because the current system diverts scarce resources to preparing information that adds little if any additional benefit to achieving taxation compliance.
"The majority of taxpayers have very simple tax affairs - they derive only salary and wages and / or interest income and have only minimal deductions - but they are still required to lodge long-winded annual tax returns.
"We consider that the effort undertaken to complete these returns is not in proportion to the revenue collected. Our proposed solution is the introduction of optional tax returns for taxpayers whose income is subject to withholding at its source," he continued.
In addition the survey revealed that 79 per cent of the respondents believe tax brackets should be indexed in accordance with the Consumer Price Index to avoid 'bracket creep.'
"The Treasury should preserve the taxation rates that apply to individuals so that they are not pushed into a higher tax bracket purely as a result of the booming economy and rising salaries," Mr Abbott said.
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Institute of Chartered Accountants in Australia
PERTH BUSINESS PEOPLE WANT TO SIMPLIFY TAX SYSTEM
The Federal Government should consider implementing an optional tax return policy according to a survey of local business people conducted by the Institute of Chartered Accountants at its annual Business Forum in Perth.
The survey revealed that 71 per cent of respondents believe that tax returns should be optional for taxpayers who have very simple tax affairs.
"The results reflect that complicated tax returns, which are required from every tax payer even when they are an employee with simple tax affairs, are an unnecessary burden on the community. An industry has been built around the completion of tax returns, which does not offer any benefit to tax payers," said Con Abbott, General Manager at the Institute of Chartered Accountants in Perth.
He also said optional tax returns should be encouraged in Australia because the current system diverts scarce resources to preparing information that adds little if any additional benefit to achieving taxation compliance.
"The majority of taxpayers have very simple tax affairs - they derive only salary and wages and / or interest income and have only minimal deductions - but they are still required to lodge long-winded annual tax returns," said Abbott.
"We consider that the effort undertaken to complete these returns is not in proportion to the revenue collected. Our proposed solution is the introduction of optional tax returns for taxpayers whose income is subject to withholding at its source," Abbott continued.
In addition the survey revealed that 79 per cent of the respondents believe tax brackets should be indexed in accordance with the Consumer Price Index to avoid 'bracket creep.'
"The Treasury should preserve the taxation rates that apply to individuals so that they are not pushed into a higher tax bracket purely as a result of the booming economy and rising salaries," said Abbott.
The survey was conducted during a presentation given this week by International Economist Professor Neville Norman.
Professor Norman said that this year's budget provided adjustments, rather than reform, which the Treasurer had to give to offset the fiscal drag that has taken place over recent years.
Addressing more than 300 Perth business people, he said that if the Government had not made the adjustments, Australians would be paying significantly more taxes in real terms.
"The Australian public would be seriously suffering from the affect of fiscal drag had Mr Costello not returned what had been taken by the Government over recent years. These adjustments will merely stop us from hurting unnecessarily," Professor Norman said.