Budget set to dodge growing tax issue

Despite recognising the recharacterisation of trading income derived through the use of stapled structures as having a significant impact on the Australian economy, the government has decided not to address the issue in the budget 2017.

Lara Bullock -
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Yesterday, Treasurer Scott Morrison released a statement addressing stapled structures.

Mr Morrison said that the government acknowledges that the growing number of taxpayers seeking to recharacterise trading income into more favourably taxed passive income can reduce the Australian tax paid by investors and may distort investment decisions and lead to reduced economic efficiency.

Mr Morrison said the government is “taking steps to eliminate this practice”, with Treasury releasing a consultation paper in March seeking views from interested parties on potential policy options to address it.

However, Mr Morrison said that the issue will not be featured in the budget 2017 as more time is needed to assess the problem.

“Recognising the economic significance of stapled structures in the Australian economy and that this is a complex and sensitive issue, the government will not be responding to the issue in the budget,” the statement read.

“This will allow more time to formulate relevant options that minimise unintended consequences. In this regard, the timeline for the review will be extended to the end of July.”

 

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