The superannuation guarantee (SG) charge and SG amnesty are key tax policy measures affected by COVID-19 that need to be urgently addressed by the federal government, a group representing the professional accounting and tax practitioner bodies has said.
The National Tax Liaison Group (NTLG), consisting of Chartered Accountants Australia and New Zealand, the Corporate Tax Association, CPA Australia, the Institute of Public Accountants, the Law Council of Australia and The Tax Institute, has listed the SG charge and SG amnesty among a number of key tax policy measures urgently requiring the government’s attention as a result of the economic impact of the coronavirus pandemic.
“The urgency has arisen due to the unfolding COVID-19 crisis which has deeply affected taxpayers and their representatives,” the NTLG said in a letter to Treasurer Josh Frydenberg.
“Many taxpayers affected by tax measures due to take effect from 1 July 2020 will, through no fault of their own, not be in a position to meet the requirements of these new measures. Further, we consider a number of announcements are required to ease the burden on taxpayers.”
The group urged the government to provide ATO commissioner of taxation Chris Jordan temporary power to defer the reporting and payment of the SG charge payable by employers.
“To help alleviate the burden employers may be facing in meeting their superannuation guarantee charge obligations on time during the COVID-19 crisis, we ask that the commissioner be provided with the power to waive penalties for late superannuation guarantee charge statements and penalties during the COVID-19 crisis,” it said.
It also called for the September end-date for the SG amnesty window to be extended to 30 June 2022 in order to take into account the fact practitioners and clients were not currently operating under normal conditions.
“The review of records and tracing required to participate in the amnesty takes time. The 7 September 2020 deadline may not be met due to impacts of the COVID-19 crisis,” it added.
In related news, Cooper Grace Ward lawyers Fletch Heinemann, Elise Emmerson, and Sarah Lancaster highlighted a key issue for employers who had disclosed their historical superannuation guarantee charge shortfalls in order to take advantage of the amnesty window, but were now unable to pay the charge because they had been negatively impacted by COVID-19.
“If employers cannot repay the SG, the amnesty will not apply – the ATO does not have the power to change this,” they said in a blog post on the legal firm’s website.
“However, the ATO has said that employers will only be disqualified from the SG amnesty for the unpaid quarters; it will advise employers which quarters are unpaid and re-apply the administration component of $20 per employee for those quarters; and it will take into account the employer’s circumstances when deciding whether the Part 7 penalties (maximum penalty of 200% of the SG) should be applied, which may result in the Part 7 penalties being reduced to nil.”
