Announced in the Mid-Year Economic and Fiscal Outlook (MYEFO), the government will provide the Commissioner of Taxation discretion to direct taxpayers to undertake an approved record-keeping course instead of applying financial penalties.
The Commissioner will be given discretion to direct an owner to undertake the course where he reasonably believes there has been a failure by the taxpayer to comply with their reporting obligations.
The Commissioner will not apply this discretion to those who disengage with the tax system or who deliberately avoid their record-keeping obligations.
The measure, aimed at targeting the black economy and assisting businesses to meet their reporting obligations, is estimated to have a small but unquantifiable gain to the budget over the forward estimates period.
Speaking to Accountants Daily, BDO tax partner Mark Molesworth said the measure merely highlighted the complexity of the current environment.
“Where the record-keeping and registration requirements are so complex that training in relation to them needs to be undertaken for those who muck them up, rather than just rapping the knuckles of those who deliberately ignore them, the requirements are clearly too complex,” Mr Molesworth said.
“Rather than add another layer of red tape — another decision that the Commissioner needs to make — perhaps the government should concentrate on making the rules easier to comply with.”
Tax and Super Australia tax counsel John Jeffreys believes more details around the record-keeping course would be needed before passing judgement on its effectiveness.
“The penalty system is a fairly blunt instrument, so this is another way to help them along the path if people want to do the right thing but are struggling,” Mr Jeffreys told Accountants Daily.
“A course like this could be overkill for some, for what might be caused by a relatively small issue and then requiring people to go through a full record-keeping course might be overkill for them.
“The typical small business owner is busy selling their product or providing their service, and if they are required to do a course, it could be quite onerous for them. What we don’t know is whether this is just a one-hour thing or if it is a series of lessons over a number of weeks.”
There is a precedent in the Commissioner directing taxpayers to undertake an approved course, with a bill passed earlier this year allowing the Commissioner to require employers to undertake a superannuation guarantee obligations course where there has been a failure by an employer to comply with those obligations.