Tag: red tape

Removing the Hassle of a Shoebox Full of Receipts

Australian taxpayers will be able to claim a $500 standard income tax deduction, without receipts, instead of going to the hassle of using receipts to claim work-related expenses and the cost of managing their tax affairs.

Assistant Treasurer Bill Shorten today released a discussion paper outlining the proposed standard deduction for individual taxpayers, which was announced in the 2010-11 Budget.

“A standard deduction removes the hassle of a shoebox full of receipts for Australian taxpayers. It simplifies income tax returns for individuals and the Australian Taxation Office,” Mr Shorten said.

From 1 July 2012, the $500 deduction, which will rise to $1,000 from 1 July 2013.

“Providing a standard deduction will remove this burden for many taxpayers and increase their tax return. No taxpayers will be disadvantaged. Taxpayers with expenses above the standard deduction will be able to continue to claim those expenses when lodging their tax return under the existing rules.”

The government thinks that the standard deduction is expected to be a chosen by approximately 4.6 million taxpayers in 2012?13,  and by 6.4 million taxpayers in 2013-14.

Of those that benefit, around 66 per cent would have a taxable income of less than $50,000 in 2012?13 and around 60 per cent would have a taxable income of less than $50,000 in 2013-14.

“A standard deduction makes it easier for working families to get the best possible tax return and continues the Gillard Government’s ongoing efforts to simplify the tax system. I encourage interested taxpayers and others to make submissions to the discussion paper,” Mr Shorten said.

The Government values consultation and invites interested parties to view the discussion paper and provide comments. Copies of the discussion paper can be obtained from the Treasury website (www.treasury.gov.au). The closing date for submissions is 8 April 2011.

The original $300 exemption from needing receipts was introduced way back when Paul Keating was treasurer and $300 was  a high level of deductions. These days most union members pay close to $500 in that one expense alone.

Cutting Red Tape and Improving Australia’s Corporate Reporting Framework

I have always been extremely skeptical when ever a politician promises to cut red tape. I met with the former NSW premier John Fahey about this way back before he even became premier, and he has been retired for ages now. And little has really changed.

However, I do think that a lot of what The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP released for discussion are very worthwhile reforms. I how they can successfully pull it off.

“The reforms will reduce unnecessary reporting obligations on companies and implement a number of other important refinements to our corporate regulatory framework.” Mr Bowen said

The key measures to reduce red-tape include:

  • significantly reducing the regulatory burden on companies limited by guarantee (which typically have a not-for-profit purpose), by introducing a three tiered differential reporting framework;
  • streamlining parent-entity reporting;
  • providing greater flexibility for companies to pay dividends, by replacing the profits test with a solvency-type test; and
  • allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.

The reforms will also implement refinements to the regulatory framework, including:

  • improving disclosure of non-financial information in the directors’ report;
  • protecting solicitors’ representation letters from disclosure to enable auditors to properly verify a company’s contingent liabilities;
  • refining the statement of compliance with International Financial Reporting Standards contained in the directors’ declaration; and
  • clarifying the circumstances in which a company can cancel its share capital.

Copies of draft amendments, the explanatory material and the regulation impact statement can be obtained from the Treasury website: www.treasury.gov.au.

The closing date for submissions is 3 February 2010.

Govt announces free superannuation clearing house service for small businesses

The Minister for Superannuation, Chris Bowen MP, and Minister for Small Business, Craig Emerson MP, last week announced that the Government will deliver its free superannuation clearing house service for small business through Medicare Australia.

The clearing house service will be available for small businesses with less than 20 employees from July 2010.

“To meet their choice of fund obligations, small businesses currently face the time and paperwork burden of paying contributions into numerous funds. The super clearing house will cut this red tape burden by enabling small businesses to pay their superannuation contributions electronically to a single location,” Minister Bowen said.

“Medicare Australia is well placed as one of the Commonwealth Government’s key service delivery agencies – with significant electronic and payment processing capacity whilst ensuring the privacy of information and the security of funds.”

Key features of the superannuation clearing house for participating small businesses include:

  • Superannuation contributions made to numerous funds will be electronically paid to a single location (the clearing house) which will process the transactions;
  • Small businesses that choose to use the clearing house service will have their legal obligation to make superannuation contributions discharged when payment of the correct amount is made to the clearing house;
  • The clearing house facility will be offered free of charge to small businesses with less than 20 employees; and
  • The clearing house will manage employers’ choice of fund obligations.

Source: Media Release from Minister for Financial Services, Superannuation and Corporate Law