The Treasurer has been called to consider a raft of tax-related changes in light of the current economic downturn, including granting the Tax Commissioner the power to defer the payment and reporting of the super guarantee charge and delaying the Division 7A changes start date.
Speaking to Accountants Daily for the first time since her appointment to the Tax Institute, senior advocate Robyn Jacobson said she would now be concentrating efforts on securing the government’s response to a number of tax policy issues that the joint bodies had previously requested for.
In particular, Treasurer Josh Frydenberg has been asked to provide the commissioner with the temporary power to defer the reporting and payment of the superannuation guarantee charge or waive the application of penalties for the late lodgement of superannuation guarantee charge statements and payments.
Ms Jacobson said this would help alleviate the burden employers may be facing in meeting their superannuation guarantee charge obligations on time during the COVID-19 crisis.
Further, the government has also been called to extend the superannuation guarantee amnesty deadline from 7 September 2020 to 30 June 2022.
“The ability for employers and their advisers to undertake the necessary calculations and pay the requisite SG shortfalls by 7 September 2020 is severely impacted by the COVID-19 crisis due to many businesses not trading in normal conditions and a significant lack of cash flow,” Ms Jacobson said.
The ATO has recognised that employers may be holding off on applying for the SG amnesty due to the financial impacts of the COVID-19 crisis, but it has confirmed that it cannot deviate from legislation and will instead be looking to work with businesses to establish a payment plan to pay their liability.
Division 7A
While the ATO will soon be issuing further guidance for taxpayers with minimum loan repayment obligations due for the year ended 30 June 2020 for complying Division 7A loans, the profession continues to wait on guidance for proposed amendments that were due to apply from 1 July.
Ms Jacobson said the government has now been urged to defer a new start date for any new measures relating to Division 7A to 1 July 2022 to alleviate the current uncertainty faced by the profession.
Main residence exemption
Ms Jacobson said the government has also been aware of the COVID-19 impact on the 30 June 2020 transitional date for the removal of the main residence exemption for non-residents measure.
With selling opportunities diminished by the ongoing crisis, the government has been called to extend the transitional date of sale period to 30 June 2022.
However, it appears that the government has been unmoved by the request, arguing that affected taxpayers have had 37 months of notice since it made the announcement in the 2017–18 budget.
“The government has indicated that affected taxpayers have had over 37 months to access the exemption under the transitional rules; however, this ingenious position fails to take into account of a lapsed bill during the passage of the bill through Parliament, and amendments to the measure before they were enacted six and a half months before the end of the transitional period,” Ms Jacobson said.
“It is unreasonable to expect taxpayers to act on the basis of an announcement that is not yet an act of law and amid a period of great uncertainty for more than three years.
“The government’s position also fails to ignore the dramatic disruption that the COVID-19 disruption has had on property sales, and the ability of affected owners to effectively market their properties and conduct inspections and auctions due to lockdown restrictions.
“The important point is that the Tax Institute was looking for a constructive outcome for taxpayers affected by the measure with the extension we are seeking, particularly given the unforeseen circumstances the COVID-19 crisis has thrown up.”
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