The efficiency of the superannuation system could be improved if the taxation of all super earnings is removed and offset by reducing the contributions’ tax concession, says the SMSF Owners’ Alliance (SMSFOA).
SMSFOA argued that changing the superannuation system in this way would mean everyone receives equal taxation of contributions, whatever their income, and this would provide an equal tax concession for all superannuants.
“Since Labor introduced the taxation of contributions in the 1980s, this is about the only practical way to provide a fairer superannuation tax system,” SMSFOA said in a statement.
“SMSF Owners has been making this point for a while and in particular in our submission to the Tax White Paper Taskforce back in May.”
The trustee association said it was encouraging to hear the government is considering structures for superannuation such as this one, in order to improve the system for Australians.
“They have also acknowledged that this system would avoid retrospective changes to the taxation of retirement savings nor require complex 'grandfathering' provisions,” said SMSFOA.
If a flat tax concession plan were to be implemented, it should be introduced alongside a less progressive income tax scale, the association said.
“We strongly agree with Treasurer Scott Morrison that matters such as super tax concessions should be considered as part of the overall retirement system of age pension and concessions,” said SMSFOA.
The association also said it was encouraging to see lifetime contribution caps being debated more seriously.
“Limiting contribution caps is clearly the fair way to limit access to tax concessions but we have argued for a few years that the current system of annual caps should be modified to provide more flexibility to Australians who have broken work patterns,” said SMSFOA.
“In trying to achieve a fairer, simpler and more efficient superannuation system, the government is on the right track in looking at re-calibrating the taxation of contributions while not taxing retirement savings.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 21 Aug 2016Risks flagged with real estate appraisal valuesBy Miranda Brownlee
- 21 Aug 2016Lawyer challenges ATO view on two fund strategiesBy Miranda Brownlee
- 18 Aug 2017ATO locks in details, addresses panic on real-time reportingBy Katarina Taurian
- 18 Aug 2017Data feeds unreliable for new reporting, says mid-tierBy Miranda Brownlee
- 18 Aug 2017Tax component confusion spurs potential tax liabilitiesBy Miranda Brownlee
- 18 Aug 2017Contributions triple in June quarter, survey showsBy Staff Reporter
- view all
- ATO locks in details, addresses panic on real-time reporting
The tax office has addressed several points of confusion with the new events-based reporting regime, locked in key deadlines, and outlined w...read more
- 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
- view all