Tag: Tax

Tax targets for the next year

ATO second commissioner Jennie Granger has given an ‘early bird’ view of some of the areas that the ATO’s Compliance Program 2008 – 2009 will be addressing, and an overview of the ATO’s tax time focus for individuals and small business. She said:

· for tax time this year, the ATO will be paying particular attention to:

o investors, particularly rental properties, dividends and interest, sale of investments, avoiding dodgy tax schemes, saving for retirement

o salary packages of executives and directors – the ATO will expand its review of highly paid executives and directors, generally people with income over $1 million

o employees and their work expense claims – the ATO will look at the growth in work expense claims particularly by nurses, medical practitioners and chefs

· the ATO will also be expanding its coverage of income tax issues this year. This includes: sale of assets and investments, foreign source income, and employer obligations (including superannuation).

Executive share options: tax ‘loophole’ to be closed

In an interview on ABC Radio National, the treasurer has indicated that the government intends to close what he calls a tax loophole concerning the use of executive share option schemes. Mr Swan said there has been a loophole in the system ‘where those with the shares who are predominately higher income earners and people who’ve accumulated shares or rights through their company, have been able to avoid paying their fair share of tax’.

It is estimated that $77 million in tax is avoided annually through this “loophole”.

Rudd Government’s proposed tax agenda

Now that the election is over, it is probably worthwhile to summarise what was promised in respect of tax changes.

The major tax promises made included:

* significant cuts in personal tax rates for those individuals whose taxable income is less than $180,000 by the year ended 30 June 2011. Labor also has an ‘aspirational goal’ to further reduce rates by the year ended 30 June 2014 so that there will only be a three tiered scale of marginal tax rates

* the introduction of a 50 per cent education refund for the costs of laptops, personal computers, software and internet costs used by students. The refund will be capped at $375 and $750 respectively for eligible primary school and secondary school students, and will only be available for families who receive Family Tax Benefit A

* an increase in the child care rebate from 30 per cent to 50 per cent on out of pocket child care costs which will be paid every 3 months rather than annually. The maximum rebate available will be lifted to $7500 annually per child

* the introduction of housing affordability credits and the introduction of a first home saver account scheme