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Accountants called on in light of FBT regime review

Accountants called on in light of FBT regime review

Record-keeping and data validation are some of the initial pain points raised in the Board of Taxation’s fringe benefits tax compliance cost review, and accounting professionals are being called on to vent their spleen.

Tax&Compliance Jotham Lian 15 October 2018
— 1 minute read

In August, the Board of Taxation announced that it would undertake a review of the compliance costs associated with FBT, with an aim of identifying areas where time and costs can be reduced.

After its initial round of focus groups, the board has now launched its anonymous online survey to help determine what recommendations will most effectively reduce the time and money employers incur to comply with FBT obligations.

Speaking to Accountants Daily, the board member leading the review, Rosheen Garnon, said it was important for tax professionals to participate in the survey to help the board develop recommendations for the future of FBT.

“Although focusing on survey design, some initial feedback received from the focus groups was that record keeping, data validation, and collecting information from employees for the purposes of FBT are burdensome for many organisations regardless of their size,” said Ms Garnon.

“Since the introduction of FBT in 1986, the way in which employees are remunerated has changed. Increasingly, employers are using fringe benefits as part of their remuneration packages. In addition, more employers today are sending employees overseas for work purposes including business trips and secondments.

“This means that employers are now spending more time on complying with FBT legislation. Tax advisers and accountants who contribute to the surveys will help us to understand the extent of this compliance burden and look at ways in which FBT compliance can be streamlined.”

It is understood that the board will also conduct case study interviews with employers to gain an in-depth understanding of the compliance costs they experience, what drives these costs and what could be done to reduce these costs.

A KPMG survey, released earlier this year, estimated that the FBT only raised 1 per cent of government revenue, even though compliance costs were almost five times higher than other taxes.

Practitioners have also called for the FBT to be scrapped as part of a comprehensive reform of taxes, considering how complex the tax has become.

Accounting professionals can complete the survey by visiting https://www.orima.com.au/FBTconsultation.

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Accountants called on in light of FBT regime review
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