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The Institute's 2008-09 Pre-budget submission

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In its 2008-09 Pre-budget submission lodged on 17 January 2008 the Institute has called for the Federal Government to address business, indirect and personal tax reform issues as well as superannuation and savings. As an initial step, the Institute has requested that a certain number of tax measures already put in train by the previous Government be dealt with as a matter of priority. This submission proceeds to make a number of other tax-related recommendations including:  
 
Business Taxation: The Institute recommends that the Government review the tax base and consider more favourable tax treatment in the following areas:

  • Company loss and bad debts rules
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  • International tax
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  • Tax policies for emissions trading
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  • Property Fund Industry - Divisions 6B and 6C
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  • Taxation of rights
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  • R&D tax concession
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  • Capital allowances
Small Business: The Institute recommends that the Government continue to address small business issues, particularly, in following areas:
  • An alternative simplified regime for the taxation of small to medium sized entities
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  • Trust loss rules
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  • Employee share scheme rules
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  • Non-commercial loss rules.
Fringe Benefits Tax: The Institute recommends that the Government commence a general review of Fringe Benefits Tax and that consideration be given to taxing fringe benefits in the hands of employees rather than the employer, as is supported by a study conducted by Atax, Faculty of Law at the University of NSW in February 2006.  
 
Indirect Taxation: Whilst encouraging the Government to conduct a general post-implementation review of the GST legislation to deal with defects, inequitable outcomes and complexity, the Institute highlights the following areas of GST in its 2008-09 Budget as needing immediate attention:
  • Cross-border services
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  • Financial services
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  • Property transactions
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  • Supply of going concern concession.
Personal Taxation: The Institute urges the Government to adopt as soon as possible the three rate scales of 15%, 30% and 40% announced by the current Government during the election campaign. We also support the introduction of optional tax returns and/or joint tax returns.  
 
Statutory Privilege for non-legal tax advice: The Institute recommends that the Government consider adopting a form of statutory privilege to protect the confidentiality of the communications between suitably qualified and regulated non-legal tax advisors and their clients and make resources available to enable the development and, ultimately, the enactment of the necessary legislation.  
 
Technical corrections: The Institute recommends an annual technical corrections bill be introduced that will receive priority in order to ensure its passage through Parliament. Alternatively, we recommend the establishment of a register of technical corrections which records all issues requiring technical correction and the status of those issues at any given time.  
 
Increase in funding for Treasury and legislative drafting: The Institute strongly recommends that resources be specifically set aside to draft the necessary amendments to implement outstanding announcements as soon as possible.  
 
Maintaining the role of the Inspector-General of Taxation: The Institute urges the Government to maintain the role of the IGT in its current independent form.  
 
A copy of the Institute's Pre-budget submission is available here.