The future of the Australian Tax System
By Arthur Kassos CPA
Come December, the Henry Review is to be considered by the Treasurer. TheReview will decide upon prospective tax recommendations that will be adapted into Australia's Future Tax System, bringing us into the 21st century and helping enhance Australia's economic and social outcomes.
One of the key elements of the report is to reduce the number of taxpayers needing to use tax agents. Currently the agents are able to retain a pre-filling report which assists them greatly in filling out a client's tax return. It provides details such as PAYG Certificate Information (group certificate), interest earned, PAYG Instalments paid, private health membership details, dividend and managed funds income and even some details of rental properties recorded in the taxpayer name from previous years.
Henry's report suggests the ATO will send out or make available similar details on a pre-filled tax return type form to taxpayers with standard deductions' they have benchmarked across all differing employee occupations.
Essentially that means they will send you a form and if you agree you will sign and return it and receive your refund or make your payment.
This will definitely simplify things and save a lot of administration and compliance work on behalf of the ATO.
If you don't agree with what you've been given, you can lodge your return as per normal and claim your income. This will affect a lot of people in the tax industry especially individual tax return businesses and small tax based practices, but unfortunately with every good intention there are always consequences.
The review panel is to deliver its final report to the Treasurer in December and it will be interesting to see the outcome.