The Government has listened to long-held concerns of tax professionals and reformed excess superannuation contribution tax traps that have tripped-up as many as 30,000 taxpayers each year, The Tax Institute said today.
The Tax Institute’s Senior Tax Counsel, Robert Jeremenko, welcomed the 2011-12 Federal Budget measure to allow refunds of excess concessional superannuation contributions of up to $10,000 for first time breaches from 1 July 2011.
“The Tax Institute has been a strong advocate for reforming the excess superannuation contribution laws so that inadvertent breaches of the caps are not unfairly penalised,” Jeremenko said.
“The Government is to be congratulated for listening to tax professionals’ concerns and taking this positive step to introduce some flexibility. This measure will likely bring relief to around 80 per cent of future breaches of the concessional caps. The Tax Institute also welcomed the commitment to return the Budget to surplus from 2012-13. The taxation system is a critical component of the Australian economy and we welcome the Government acknowledging that reforms are needed.”
“With a stronger fiscal position, there is a greater prospect of significant tax reform, which is vital to ensure that Australia is well positioned for the challenges of the next 40 years. Using the tax system to remove impediments to infrastructure investment is welcome. This measure will support investment in designated projects by making it easier to recoup project losses as well as maintaining their real value.”
“Legislating the definition of a charity is a positive measure that will clarify ancient laws that date back some 400 years. Charities make a significant and positive contribution to our society, which is why consultation will be important on the proposal to change the tax treatment of profits generated by a charity’s unrelated commercial activities.”
“The Budget measure applying a flat statutory rate to car fringe benefits so that it doesn’t change as more kilometres are driven is a sensible reform that is a step towards a simpler fringe benefits tax system. It will also remove any incentive that may exist for people to drive further just to pay less tax. People who drive long distances will still have the option to use log-books to further reduce their FBT.”