The release of the federal Budget is always a time for reflection for the Board. We get to see the fruits of our labour through the Government’s response to the Board’s advice, and it helps us set a direction on how best to support the Government in positioning the tax system to achieve national objectives.
We are delighted to see that this Budget included changes to the individual tax residency rules to make them more certain and easier to understand and apply in practice. The changes are a clear example of what I described in my keynote address to the Tax Institute’s Tax Summit: Project Reform last year as ‘tax reform in action’. They will build on the reforms to corporate residency announced last year and will be critical to the Government’s strategy for attracting global talent to Australia.
Developing the new, modernised framework for individual tax residency has been a significant part of our work program since 2016. Since joining the Board, I have often observed the tax community’s desire to see changes implemented urgently. However, transformative changes to the tax system can have a long lead time. I often remind our stakeholders that our reports are designed to have a long shelf life, serving as a resource that can help guide longer-term reform. I want to encourage your patience and continued enthusiastic participation in working with the Board.
The long shelf life of the Board’s work is evident in another announcement included in the Budget to progress the tax and regulatory reforms for corporate collective investment vehicles. These reforms partly draw on the work the Board completed in 2011.
The final aspect of this year’s Budget I want to note is the Government’s announcement that the Board will undertake a review of the administrative framework of the research and development tax incentive. We invite you to get in touch with us so we can hear your ideas on streamlining the administrative processes of this vital component to the Government’s strategy in encouraging innovation and investment.
With your help, we look forward to another productive year in assisting the Government as it navigates Australia’s economic recovery from COVID-19.