In a submission to Assistant Treasurer Michael Sukkar, external members of the National Tax Liaison Group (NTLG) — including the Corporate Tax Association, Chartered Accountants Australia and New Zealand, the Institute of Public Accountants, the Law Council of Australia (Business Law Section) and the Tax Institute — have called for a number of improvements that it believes will significantly improve consultation on tax policy and administrative matters.
One of the ideas calls for the requirement to consult at the pre-policy stage on all routine/technical tax law changes in a bid to improve the quality and clarity of tax policy changes and increase genuine engagement from the business and community sectors by allowing stakeholders to participate more fully in the decision-making process.
“Public awareness of pre-announcement consultations is often limited by confidentiality, which contributes to the perception that little or no pre-announcement consultation was undertaken,” the paper stated.
“This initiative would allow all stakeholders in the tax system the opportunity to contribute to the development and understanding of tax policy. This should reduce the likelihood of perceptions that Treasury and ATO views on the intent of the law are ‘entrenched’.”
The external NTLG members also believe that achieving tax legislation that is consistent with policy intent and serves national interest will require collaboration that is “underpinned by a strong, well-understood consultation framework”.
“Given the complexity of the tax system and ever-evolving tax policy landscape, the nature of consultation between the government and non-government sectors should be determined in a systemic way,” the paper said.
Further, it believes there should be a clarification of the policy objective of tax legislation at the start of the tax law design process, and that Treasury and the ATO adopt an explicit commitment that legislative products and ATO guidance match their stated policy intent.
The group has also called for an annual review, prioritisation and publication of the backlog of announced but unenacted measures.
“The sheer volume of tax changes flowing through the system at any given point makes it extremely difficult to keep track of the status of impending law changes,” the paper said.
“A lack of visibility over Treasury’s forward work program or the number of announced but unenacted changes also appears to decrease stakeholders’ appetite for applying resources to the simplification or care and maintenance of the tax system.”