As calls for superannuation tax concessions to be reformed intensify, one industry body has argued the case for high-income earners to receive generous tax concessions in superannuation.
With the national tax reform debate heating up, there have been calls for superannuation concessions afforded to high-income earners to be examined.
Recently, former ATO senior director Mark Chapman told SMSF Adviser there are “very generous” tax breaks for high-income earners.
“I think the thing is that for taxpayers who are earning the highest level, there’s very generous tax breaks, whereby they’re saving the highest rates of income tax and basically being taxed at 15 per cent on the super that’s going into their super funds,” he said.
“Now I can understand why that happens from the perspective of encouraging people to use super as a way of saving for their retirement, but the problem is that the cost of that to [government] revenue is just becoming increasingly unwieldy.”
Speaking to SMSF Adviser, SMSF Owners’ Alliance executive director Duncan Fairweather said it shouldn’t be surprising that those who are on higher incomes benefit from superannuation tax concessions.
“What’s often overlooked in this debate is that the people on higher incomes paying many more dollars in income tax than those on lower incomes are.
“So while they’re getting a higher dollar benefit from the tax incentives or the tax concessions, they are paying much more in the first place in terms of income tax.”
Mr Fairweather said there are valid economic and social reasons to afford tax concessions to superannuation members, and called for an equitable debate around tax reform.
“Superannuation is a long-term investment that runs over the whole of your working life and the whole of your life in retirement, there needs to be consistency and stability and certainty of policy,” he said.
“We’re certainly not opposed to any change but it must be carefully thought through and implemented over time in a way that doesn’t disadvantage people who have saved under the existing rules.
“We’re not digging in our heels and saying nothing should be changed with superannuation system, but what we do say is if there is to be change particularly around taxation, then it needs to be carefully thought through and it needs to certainly requires a lot of consultation with stakeholders.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 08:20Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 08:00Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 08:00Contributions triple in June quarter, survey showsBy Staff Reporter
- 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
- view all
- Data feeds unreliable for new reporting, says mid-tier
With an estimated 20 per cent of SMSFs still encountering errors from data feeds, one mid-tier firm believes the ATO should allow SMSF pract...read more
- Tax component confusion spurs potential tax liabilities
A lack of understanding around taxable and non-taxable components in super funds could be exposing SMSF clients to unnecessary tax liabiliti...read more
- Contributions triple in June quarter, survey shows
The average contribution amount from SMSF trustees tripled for the June 2017 quarter, with super members looking to maximise their contribut...read more
- 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
- view all