Late last month, the Board of Taxation announced it would be launching a review led by board members, BDO partner Dr Mark Pizzacalla and head of the Office of Parliamentary Counsel Peter Quiggin to identify areas where concessions are less effective, or not well-targeted, with the aim of improving these existing concessions and potentially recommending new concessionary approaches.
Submissions from the accounting and small business community will be accepted up till 20 July 2018, with Mr Pizzacalla telling Accountants Daily that the board has already started receiving feedback from the industry.
According to Mr Pizzacalla, the board is currently in the process of discussing consultation dates and will soon publish a timeline around roundtable meetings for interested parties to participate in.
“The purpose of the review is to look at these concessions and ask of these concessions, are they working the way they should be, should there be different concessions, should there be new concessions, because in the past not all tax concessions have gone to plan and some concessions have been deleted over the years,” said Mr Pizzacalla.
The Institute of Public Accountants general manager of technical policy, Tony Greco, who is part of the review’s reference group, said the review was timely, considering how previous small business studies have highlighted stress points surrounding tax concessions.
“The concessions have not been revisited holistically as a bundle so that's our job to see if they are still fit for purpose,” said Mr Greco.
“We will also look at it from the point of view of looking at it from a life cycle of a business and see all the touch points – when do they help in the life cycle of a business, are they all skewed one end or the other end and it's a very important process we're going through and something that will hopefully produce a better outcome.
“If the government is out there saying they want to promote small business start-ups but we've skewed all the concessions towards the end of the cycle then it's not going to do that.”
‘Not just a paper exercise’
Mr Greco was quick to dispel any fears that any recommendations from the review would be disregarded by the government, noting that “the reasoning behind the recommendations are more important than the actual recommendations” because it will eventually influence policy.
“The expectation is that all the recommendations get adopted. The answer is rarely does that happen. What happens more likely is that they do get seriously looked at over time but you may not see an initial full support of the recommendations straightaway,” said Mr Greco.
“With all the previous major reviews that have happened, history tells us that the government tends to gravitate towards those recommendations over time and there are always other competing demands so it's unrealistic to expect everything to be adopted but it does influence government policy going forward.”