$3K TAX CAP: POLICY LOOKING FOR A PROBLEM
15 April 2019
By declaring tax deductions for accounting fees as a rort, Labor has not only attacked the accounting profession, it has attacked millions of hard working taxpayers who are doing the right thing in paying their fair share of taxation, says the Institute of Public Accountants (IPA).
“When the Opposition proposed to cap deductibility of tax agents’ fees to $3,000 (May 2017), it assumed a one-size-fits-all approach works, which is simply not the case,” said IPA chief executive officer, Andrew Conway.
“The Prime Minister and Treasurer have issued a letter to accountants expressing concerns over this measure, which we will disseminate to our members. If the Opposition provides a response to these concerns we will also distribute the correspondence to members.
“To be clear, we support the fact that all Australians should pay their due share of tax but they should also be able to access the appropriate tax deductions available to them to ensure they are not overpaying.
“Labor’s views on this matter shows a lack of understanding about, and respect for, what it takes for an accountant to appropriately manage an individual’s tax affairs. It is not always a matter of a simple tax return; there may be many other factors associated with our highly complex tax system.
“For some, there can be considerable time spent in areas of tax audit, litigation, disputes and other interactions with the Australian Tax Office.
“Further complexities exist with the formation of partnerships, trusts, property acquisitions and disposals.
“These are all factors of a change in someone’s life circumstances which may also include ordinary taxpayers involved in situations like restructuring, divorce and sale of a business, to name a few.
“To bundle all of this under the heading of ‘managing tax affairs’ does not reflect a genuine picture of a person’s life circumstances and undermines the value of the work performed by accountants.
“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.
“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,” said Mr Conway.