The government should address the tax concessions afforded to superannuation as it looks to nationwide tax reform, according to one advocacy group.
Speaking to SMSF Adviser, Mark Chapman, taxation products and services manager at Taxpayers Australia, said tax reform is necessary on a national scale and has been “for quite a few years”.
Mr Chapman stressed the importance of addressing the entire tax system rather than just areas that might be “politically expedient” to look at.
The GST in particular should be re-examined, Mr Chapman said, noting the equivalent tax in other jurisdictions sits at approximately 20 per cent.
“The people who would potentially be hit by that the most are those at the lower end of the income spectrum, so I think we also need to look at superannuation tax breaks to determine whether they are currently too generous for those on higher incomes,” he said.
Taxpayers Australia’s superannuation products and services manager, Reece Agland, has previously told SMSF Adviser the “excessively generous” deductions in superannuation available to the wealthy are unsustainable and need to be considered in any genuine tax reform process.
“While most of us will need superannuation to provide for our retirement, the wealthy do not. Without it they would still be able to make adequate preparations for their retirement years,” Mr Agland said.
Mr Chapman also said negative gearing needs to be looked at to determine whether the tax relief afforded to property investors are too generous.
“There’s no economic rationale, there’s no housing market rationale, which should allow people to be able to use those sorts of tax losses quite as generously as they are now,” Mr Chapman said.
“There is a group of taxpayers typically at the top end of the income spectrum who are being excessively advantaged by the use of those reliefs.
“That’s causing I think all sorts of impacts down the line in terms of where the housing market is structured [and] the ability of first-time home buyers to get into the market.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 17 Aug 2017Industry questions ATO’s capacity for new reportingBy Miranda Brownlee
- 17 Aug 2017Qld succession law changes tipped to impact SMSFsBy Miranda Brownlee
- 16 Aug 2017Contribution limits restricting future balances, warns mid-tierBy Staff Reporter
- 16 Aug 2017SMSF firms underprepared for events-based reportingBy Miranda Brownlee
- 15 Aug 2017SMSF auditor disqualified for misconductBy Staff Reporter
- 15 Aug 2017Class gains market share in financial year resultsBy Staff Reporter
- view all
- Industry questions ATO’s capacity for new reporting
With events-based reporting set to generate huge amounts of data, concerns have been raised about whether the ATO’s systems will be able t...read more
- Contribution limits restricting future balances, warns mid-tier
Clients hoping to accumulate a superannuation balance of $1.6 million by age 65 will need to start taking full advantage of concessional con...read more
- SMSF firms underprepared for events-based reporting
A straw poll has revealed that the majority of SMSF firms currently feel their firm is not equipped to deal with the proposed events-based r...read more
- view all