Accountants encouraged to rally against Labor’s ‘significant policy change’

Accountants encouraged to rally against Labor’s ‘significant policy change’

rally against Labor’s ‘significant policy change’, thumbs down

Labor’s plan to cap the deductibility of tax advice could be palatable to voters given it would raise $1.3 billion, so the Institute of Public Accountants believes debate should be “run up the flagpole” well ahead of the next election.

In early May last year, opposition leader Bill Shorten said a Labor government would cap the amount claimed by individuals for management of their tax affairs at $3,000.

The proposal has since fallen out of the tax debate agenda in Australia, and chief executive of the IPA, Andrew Conway, is calling on tax agents to voice their opposition to ensure this measure doesn’t quietly pass should a Labor government come into power next year.

Given the policy provides a substantial budget boost and shadow treasurer Chris Bowen estimates the measure would impact about 1 per cent of taxpayers, it could get over the line.

“It 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,” Mr Conway told Accountants Daily.

“We think it would 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 get it. This is not affecting the top end of town, it's really affecting individuals who might be running small businesses,” he said.

“We think it’s tax policy construction gone mad,” he added.

Deloitte also raised concerns that the proposal could also hinder an individual’s ability to seek private rulings or challenge the ATO. In its current form, the deduction includes appealing to the Administrative Appeals Tribunal or court in relation to tax affairs and dealing with the ATO about tax affairs.

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Accountants encouraged to rally against Labor’s ‘significant policy change’
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