Compliance, Legislation, Tax

Submissions require real evidence

Treasury Consultation Division 296 tax Stakeholders Submissions

Some stakeholder criticism regarding the Division 296 tax was treated less seriously by Treasury due to a lack of evidence supporting the concerns raised.

Treasury has revealed some stakeholder responses regarding the proposed Division 296 tax on total super balances over $3 million were given scant consideration as they were unsupported by actual data and, as such, were treated more as ambit claims.

“We keep getting feedback from some sectors about their concerns over [the proposed Division 296 tax] and there was one industry group that came to me and said this will impact 33 per cent of our members,” Treasury retirement income policy division first assistant secretary Lynn Kelly said during a panel session at The Tax Institute National Superannuation Conference held in Melbourne recently.

“I asked for data to back it up and wasn’t given any. I then asked the ATO for data and it had some on its website that I could access. When I [examined the information], I found that of the impact it would have on the population today [it indicated] less than 5 per cent [would be] impacted of the broader industry.

“So now when I talk to [that] industry association, I have some question marks over its claims.

“Ambit claims aren’t particularly helpful, [unlike] evidence-based, practical [feedback]. I can work with that and I can give that to ministers and I can say these are the concerns, this is who it impacts and this is why it matters.”

Kelly pointed out, by contrast, how some of the industry submissions she received regarding the non-arm’s-length expenditure (NALE) rules were far more constructive.

“Some people in this room actually came to talk to us about NALE and they gave some real-life examples of the compliance costs [involved], what actually it was looking like in their business, and it was evidence based. It wasn’t [like a] dressed-up ambit claim, it [was presented as] this is what we are actually doing and this is what it looks like,” she noted.

The submission resulted in a conversation with Treasury over the integrity concern raised and whether the tax system was the appropriate place for that integrity concern, she said.

“So that was a really good example of bringing an issue to me that was evidence based,” she noted.

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