The recent news that the Government is pushing the National Tax Summit to October and will not be covering key tax issues such as GST, the proposed carbon tax and the mining tax is worrying.
No doubt the Henry Review will be high on the agenda with its 138 recommendations to improve Australia’s tax system. Although with only an initial four recommendations given the green light when it was released last year, it leaves me in doubt as to what will be the actual outcomes of the Summit and how serious the Government is about tax reform.
Australia’s small businesses are drowning in a sea of red tape. Not only do they have to deal with the same compliance regulations that are designed for big corporations that have more resources, they have to deal with a government that doesn’t seem interested in supporting them or simplifying the tax system.
It’s no secret that for the last six months the Australian Tax Office (ATO) has become more stringent and rigorous in its actions, particularly when it comes to tax debt, and this has had a huge impact on small businesses.
It’s upped the ante on data matching, been more severe and demanding when it comes to paying back debt to the point where they are handing out garnishee notices to business’ banks in order to obtain amounts owed and now they’ve announced they will be cracking down on GST payments.
However, it’s not all bad. Recently the Assistant Treasurer Bill Shorten announced the ATO will continue to allow the streaming of capital gains and franked dividend by trusts. Previously it was thought the ATO would ban this practice which allows a trustee to legitimately make tax effective distributions of income and capital gains to beneficiaries.
Now don’t get me wrong, I believe it’s extremely important to have a regulatory body to ensure compliance standards are upheld by business entities. However, when the Government is so lax on addressing the needs of small business but instead at nearly every turn makes it harder for them to survive, it just feels like a kick in the guts when they keep ‘cracking down’ on businesses in order to extract yet more blood from the stone.
This is why it’s crucial for businesses to employ a tax advisor who is proactive and works with you to navigate the maze of tax and compliance and but also looks at the bigger picture to make sure your affairs are managed so you don’t end up paying unnecessary tax or penalties.
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