The first income tax assessment act was passed in 1915, and according to H&R Block, the legislation has expanded exponentially in both volume and complexity since its introduction.
Mark Chapman, director of tax communications at H&R Block, said that now is the time for the federal government to trim the current legislation – although perhaps not back to its original size.
“The average Australian could easily fill in a tax return based on the original act, which featured many of the deductions that are still in force today,” he said.
“However, nowadays, it would be very difficult for any Australian to wade through the two volumes of the tax act to prepare their personal or company returns,” Mr Chapman added.
Stamping out the unnecessary complexity is key to the reform, he said.
“We have made a submission to the federal government, as part of its current review of the tax system, and the main priority should be to both cut it down and return it to plain English.”
H&R Block has also put forward considerations regarding an annual indexation of income tax thresholds to eliminate ‘bracket creep’, and a loosening of self-education expense deductions.
“We look forward to further engaging with Treasury in its efforts to create a clear set of policy priorities for the future, with the key priority to return to a tax act that normal taxpayers can actually understand,” Mr Chapman concluded.