The Institute of Chartered Accountants in Australia (the Institute) today called on the government to be prepared to issue prompt legislative change in the tax arena as it considers further fiscal stimulus in response to the global economic downturn. 
 
“Tax issues that may have been sidelined in a prosperous economy, such as debt/equity swaps, liquidations, losses, write-downs and certain reorganisations, will become important levers to fuel the economy,” said Institute Tax Counsel Yasser El-Ansary. 
 
In its pre-budget submission to the federal government, the Institute also called for immediate attention to measures already approved by government that have not yet been legislated, particularly those relating to foreign currency, consolidation and losses. 
 
“In this economic climate businesses need certainty around previously announced measures relating to consolidation and losses. Resources need to be made urgently available to ensure that these issues – along with those that will be announced in the 2009/10 budget – are enacted as soon as possible,” said Mr. El-Ansary. 
 
With respect to climate change, the Institute continues to encourage the government to review its tax treatment of emissions permits under the proposed Carbon Pollution Reduction Scheme (CPRS), and consider initiatives to encourage business take-up of green technologies. 
 
“The government’s white paper is silent on tax incentives for businesses to adopt green technologies. If the CPRS is going to take effect on 1 July 2010, then these incentives need to be considered as part of the budget process,” said Mr. El-Ansary. 
 
The Institute has also advocated for R&D measures to support the large scale private investment required to meet carbon pollution reduction targets.  
 
Mr. El-Ansary said that “R&D measures could include increasing the deduction on eligible green technology R&D expenditure to 200 per cent and either amending – or alternatively, removing altogether – thresholds applying to R&D tax offsets for companies developing green technologies.” 
 
The Institute’s pre-budget submission also includes recommendations on company loss and bad debt rules, international tax issues and managed investment trusts. 
 
The Institute has lodged a separate pre-budget submission on superannuation issues.