On 20 March, the Federal Government announced the budget would be delayed until 6 October, saying that the COVID-19 pandemic made it “extremely difficult to formulate reliable economic and fiscal estimates” at that time. The Treasurer and Prime Minister also flagged broader tax reform.
In a survey distributed to Tax & Super members early in August, we asked our members about their thoughts on tax reform measures as well as emerging and ongoing tax issues that affect both businesses and individuals.
Despite 20 years of GST at 10%, more than half (54%) of members did not want to see it raised, while 37% would support a rise to 15%.
Most (82%) members also supported the Division 7A exception rules being broadened to allow loans to be repaid within two income years. Meanwhile, on FBT, 56% of respondents said the tax should be abolished for small businesses, while 23% said it should be removed for all entities.
When it came to individual tax rates, 66% supported lowering rates, with the remainder saying that tax rates are in line with salaries and cost of living.
Other topics covered include extending the boosted instant asset write off, changes to the CGT small business concessions, repayment rules for Div 7A loans, JobSeeker rates, SG rates, drawdown rates, and tackling the newly COVID-driven deficit. More details of the survey results can be found in this longer article (PDF, 659kb).
Selected member quotes
- Just make the Income Tax Act much simpler.
- …abolish FBT on cars but limit car expense tax deductions.
- Franking credits derived in SMS Funds classified as allocated pensions, they should not produce tax refunds.
- Increase the SG to 10% with legislation that does not allow access to super balance until 55 and only as an income stream at no more than 5% or 20 years minimum.
- ….a flat rate of income tax of 20%, but keep the safety net for low income earners and part timers.
- GST should be raised if there is an income tax reduction for the workers…
- I just wish clients wouldn’t create the Div 7A loans in the first place.
