The Board of Taxation is a non-statutory advisory body charged with contributing a business and broader community perspective to improving the design of taxation laws and their operation.
Ideas for better tax regulation
Superannuation Guarantee Ruling SGR 2009/2 - Update to OTE
There seems to be some outdated exclusions as to what is included as OTE 1. Make-up payments for Jury Service are not included in OTE for SG purposes, disadvantaging employees when they are compulsorily attending Jury service (Para 37. An employee may receive 'top-up payments', such as those made while serving on jury duty or with defence reserve forces, that make up some or all of the difference between any amount the employee is receiving for performing such service and the ordinary time rate of pay he or she would earn if not performing such service. Top-up payments of this kind are not OTE as they are excluded from being 'salary or wages' in the SGAA by Regulation 7AD of the SGAR: see paragraph 59B of this Ruling. 2. Exclusions under paragraph 57A: a. salary or wages of less than $450 paid to an employee in a month. This disadvantages the lower paid workers, potentially increasing the need for government support in their 'golden' years. b. salary or wages paid to a part-time employee who is under 18 years of age The effect of compounding is well known. Early start to savings will reduce the drain on the public purse. With the prevalence of payroll software adn the recent introduction of SuperStream, the administrative burden of making the payments has been greatly reduced. 3. Paid Parental Leave and other ancillary leave (34. However, payments made while a worker is on paid parental leave or other kinds of ancillary leave are not OTE as these types of leave payments are excluded from being 'salary or wages' in the SGAA by Regulation 7AD of the Superannuation Guarantee (Administration) Regulations 1993 (SGAR): see paragraph 59B of this Ruling. ) For equity purposes, especially in the case of employees taking military leave, or who are emergency service volunteers (e.g. SES, fire brigades), they are being penalised for giving their time to the community. Link to SGR 2009/2 http://law.ato.gov.au/atolaw/view.htm?Docid=SGR/SGR20092/NAT/ATO/00001
Excess Superannuation Tax
The Board has received the following suggestion during the course of its consultations. The current provisions around excess superannuation tax are bureaucratic and cumbersome especially for non-executive directors with the decision to include death and disability insurance in the superannuation contributions cap. Many persons will inevitably be in breach of the cap, especially those receiving multiple group certificates. For a 60 year old, death and disability premiums may be 20-25,000 themselves. They will receive an amended assessment 2 years after the event requiring them to transfer funds out of the fund, together with an earnings adjustment plus penalty. The ATO assessments have a very high error rate and result in considerable cost and professional fees to comply. Surely a system could be introduced to cash out the superannuation guarantee obligations by a single adjustment notice where the recipient knows that they will be over the limit. The Board is interested in getting the thoughts of the Sounding Board community on this issue. Do people share a similar concern? Do people have an example that they could share where they may be in breach of the cap?
SAPTO transfer to spouse: formula update
A formula in regulation 12(3)(b)(ii) in INCOME TAX ASSESSMENT (1936 ACT) REGULATION 2015 still contains figures $6,000 and 15% which appear to be references to old income tax rates and tax-free threshold. Subregulation 12(4)(a) contains a reference to $6,000. Based on this regulation, presently taxpayers with taxable incomes falling within the $18,200 tax-free threshold may not be able to transfer unused SAPTO to their spouse in full. The regulations on transferring the unused SAPTO should be amended to fix this anomaly and enable low-income taxpayers to transfer SAPTO to their spouses. ATO QC 48694
Meetings & events
- 7 Dec 2017 - Melbourne
- 19 Oct 2017 - Perth
- 14 Sep 2017 - Sydney