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SME tax concessions to be reviewed by tax board

SME tax concessions to be reviewed by tax board

In a bid to improve its effectiveness and ease of access, the Board of Taxation will conduct a review of small business tax concessions, after calls from the industry for simplification and greater consistency.

The review will be led by BDO partner, Dr Mark Pizzacalla, and head of the Office of Parliamentary Counsel, Peter Quiggin, both members of the board, and will work in close partnership with a reference group that will feature small business tax experts including the Institute of Public Accountants senior tax adviser, Tony Greco, and CA ANZ senior tax advocate, Susan Franks.

The review will examine the current suite of tax concessions and identify areas where they are less effective, or not well-targeted, with the aim of improving these existing concessions and potentially recommending new concessionary approaches.

Some of the core questions raised by the review will look at what tax issues are of particular concern for small businesses, which concession is not working or should be removed, and what is the most useful or effective concession.

Submissions from the accounting industry and small business community will be accepted up until 20 July 2018, with the board due to present its final report to the government in October 2018.

The review follows calls from the Tax Institute to simplify its approach towards the eligibility criteria for small business tax concessions, noting the varying rules and shifting definitions that create confusion for tax practitioners and their small business clients.

Key issues

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Welcoming the review, the Tax Institute’s senior tax counsel Professor Robert Deutsch said he was confident that the Board of Taxation would address the current issues affecting the community.

“I think they are on the money with the questions they are asking and they certainly are focusing what I would consider to be the key issues,” said Professor Deutsch.

“If they get detailed answers on all of those questions, they'll be well on their way of having a programme to introduce new legislation that would be far more beneficial.

“The only thing I haven’t seen is consistency and that's one of the things that is bothering me about the definition of a small business and there are so many different and inconsistent views about it and it is kind of embedded in the questions they've asked but I think I'd like to see it more expressly asked — whether it is possible to develop a comprehensive, all embracing definition of what is a small business for all taxation purposes rather than having different definitions depending on what particular tax provision you are looking at.”

Commending the review as a “genuine attempt” to address issues facing the small business sector, Professor Deutsch said his only concern was the government’s reception and implementation of the review findings in light of the upcoming federal elections.

“I'm not cynical about it, this is something that is well overdue, and it needs to happen soon but there are some constraints with that with the federal election coming up and that may well impede some of the progress of this,” said Professor Deutsch.

“Once that's out of the way, whoever wins will need to consider what the Board of Taxation has to say about all of this and I think it has real potential to make life much easier for small business and I am all for that.”

SME tax concessions to be reviewed by tax board
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