Standard deductions and other tax reforms

I remember John Jeffreys summarising his first JobKeeper webinar and bringing up the mental wellbeing of accountants and the stress the additional work will bring as well as working from home.

If the ATO keeps up the pressure of demanding late returns and doing tax audits, which will keep us away from catching up on current returns, family time, health checks, rest, etc, there are a lot of tax agents over 60 years of age (and they would be over 10% of the tax agent population and I am one of those) who will just walk out of their practice on 30 June.

Some will have heart attacks, some will get other types of illnesses, and there may be some suicides.

Because of COVID, the complicated requirement of nearly every individual to lodge a tax return is now outdated and it is time to encourage those that are able to go online and be given some sort of standard expenses deduction, with a guarantee that those expenses will not be audited. This is something that should only take 3 minutes to do as salary and wage income, interest, dividends and health Insurance will be pre-filled.

The only thing that can be changed are bank account details, spouse details and the number of kids. Bring back eTax and paper forms, or go to a tax agent for the more difficult returns. Then we can catch up.

And then bingo — research conducted by the Blueprint Institute and titled “Bye bye tax returns”.

I said in 1999 when the GST was announced that you can’t have tax returns, GST, and tax agents. One will have to go, and at the moment it is tax agents. I said then that tax returns should go which met with resistance from my colleagues and now they are suffering.

Now is the time to bite the bullet and administer real tax reform. When I say tax reform it is tax administration that needs reform, not providing tax cuts and calling that tax reform. If we can reduce the number of returns that need to be lodged each year then we have time to chase up the late and non-lodgers. A tax amnesty in two or three years probably would not go astray as well when lodgments are up to date.

IG, Melbourne

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