The Labor Party, if elected, plans to introduce a $3,000 cap on the tax deductibility of fees from accountants.
On Friday last week, Opposition Leader Bill Shorten labelled the deduction a “rort” which favours the wealthy.
However, associations like the Institute of Public Accountants, who advocates for the SME community, believe the policy will in fact have an impact on small business and taxpayers in distress.
“Simply put, genuine taxpayers are not rorters. They should be seeking the right tax advice from their trusted adviser, the accountant, to make sure they continue to claim their rights and pay the correct amount of tax,” said chief executive Andrew Conway.
“Labor’s proposed measure is genuinely and obviously a revenue grab. If you cap it at $3,000, the likelihood of a person engaging appropriate tax advice is reduced. This could have disastrous impacts on the community.
“If you look at the people who are generally deserving of a tax deduction, based on this proposal, they would be unable to access it. This is not affecting the top end of town, it’s really affecting individuals including small business owners.”
Prime Minister Scott Morrison and Treasurer Josh Frydenberg have since written to the major associations representing accountants, saying that they have “real concerns” about the consequences of this policy.