Board of Taxation review into FBT compliance costs

 

The Board of Taxation has recently announced that it is launching a comprehensive review to determine whether there are opportunities for compliance costs to be reduced that are associated with employer obligations under FBT.

In order to understand the sources of compliance costs, the Board of Taxation (BOT) is conducting focus groups, online surveys and case study interviews. It is currently seeking employers that provide fringe benefits to participate in focus groups (to help with the survey design) and case study interviews (to explore their FBT compliance experience in some detail).

These processes will provide invaluable assistance to BOT in understanding the time and money organisations spend complying with their FBT obligations and the drivers of those costs, and help BOT make recommendations on how compliance costs could best be reduced. It has also formed a working group made up of representatives from the ATO, Treasury, academia, the G100 and professional firms.

Any Tax & Super Australia members who are willing to participate can register their interest by sending an email to research@taxboard.gov.au.

Further details on the focus groups and case study interviews are available on the BOT website, and a link to the survey (which will be open to tax advisers and employers) will be posted on the same BOT webpage when it opens in late August or early September. The survey will collect large-scale data on compliance costs and the drivers of material compliance costs. This will include a survey of a random sample of taxpayers as well as a public survey for stakeholders to complete on a voluntary basis.

The Corporate Tax Association (CTA) is an advocacy body representing major companies in Australia on corporate tax issues. CTA says its members are very concerned with the costs of compliance, with FBT absorbing a lot of time in this regard. Early results of a CTA benchmarking survey in the context of FBT found that 7% of corporate tax team resources are spent on complying with FBT, compared to 7% on GST and 18% on income tax. “Compare that to the revenue collected (which has sat at around $4 billion for some time now) and you have an absurdly skewed tax, which in relative terms costs much more to comply with than it collects.”

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