August 2006
Just before the end of the Parliamentary Budget sittings, two new tax Bills, Tax Laws Amendment (2006 Measures No 4) Bill 2006 and Tax Laws Amendment (Repeal of Inoperative Provisions) Bill 2006 were introduced into Federal Parliament. In addition, several amendments have been made to the income tax regulations recently, primarily as a result of the new personal income tax rates applicable from 1 July 2006, and the new fringe benefits tax rate applicable from 1 April 2006. We review these legislative and regulatory changes below. Parliament will resume for the Spring sittings on 8 August 2006.
Repeal of inoperative law - the easy part
Tax Laws Amendment (Repeal of Inoperative Provisions) Bill 2006, introduced into the House of Representatives on 22 June 2006, repeals over 4,100 pages of tax law provisions and over 1,500 pages of a number of tax Acts that have been identified as inoperative.
An inoperative provision or Act is one which no longer applies to taxpayers, either because it has no effect after a date in the past, or because all the transactions it did affect have now concluded.
The repeal of inoperative provisions, which will no doubt save paper and ink with the annual reprinting of consolidated tax legislation, is the easy part.
It will unfortunately do little to reduce tax compliance costs.
There are many redundant or overly complex provisions in Australia’s income tax legislation which taxpayers and their tax advisers have to consider when considering the tax implications of transactions. Australia is notorious amongst Organisation for Economic Co-operation and Development countries for the complex drafting and detail of its income tax laws. It remains to be seen whether the Government tackles the harder issues of tax simplification - this may mean giving up some revenue, and in some cases, eliminating tax concessions.
