The federal government should extend the deadline for superannuation guarantee (SG) amnesty applications to March 2021 in light of the impact of the coronavirus pandemic, a group representing the professional accounting and tax practitioner bodies has said.
The Joint Bodies, consisting of Chartered Accountants Australia and New Zealand, CPA Australia, the Corporate Tax Association, Institute of Public Accountants, Law Council of Australia, The Tax Institute, and the Self-managed Independent Superannuation Funds Association (SISFA), has called for employers to be granted a six-month extension to the current SG amnesty deadline of 7 September.
In a letter to Assistant Minister for Superannuation and Financial Services Jane Hume, the joint bodies cited the time-consuming nature of the SG amnesty application process during a time of increased stress for many employers due to the COVID-19 pandemic as a key reason for extending the deadline to 7 March 2021.
“In view of the business disruption caused by COVID-19 and severe impact on the cash flow of most businesses, the joint bodies are concerned about the difficulties confronting many employers in being able to make an application for the SG amnesty by 7 September 2020,” the Joint Bodies said.
“[A] legislative amendment to extend this date to 7 March 2021 will allow sufficient time for employers to apply for the SG amnesty without placing their HR and payroll areas under undue stress.”
As part of their submission, the joint bodies also requested an open extension be granted to commissioner of taxation Chris Jordan after the close of the SG amnesty in order for him to retain his discretion to waive the entire 200 per cent penalty under Part 7 of the Superannuation Guarantee (Administration) Act 1992.
“[A] legislative amendment should be made to remove the current limit so that the commissioner will continue to have broad discretion to waive the entire Part 7 penalty for liabilities that would have qualified for the SG amnesty (had an eligible application been made by the deadline) because there is a high likelihood that many employers may miss the SG amnesty deadline (even with an extended deadline) because of the overwhelming impact of COVID-19 on their businesses,” it said.
The Joint Bodies cited the “harsh operation” of the Part 7 penalty as an additional reason for an open extension to be granted.
In a separate submission, SISFA called on the government to allow the return of excess pension payments for the 2020 financial year and remove proportionate indexation of the transfer balance cap.
In April, the NTLG 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.