29/02/2016
The Board of Taxation
Michael Andrew AO, Chair
“The path to tax reform”
1
“If you don’t know where you’re going, any road will
get you there” – Lewis Carroll
1
29/02/2016
Different perspectives on tax reform
POLICY
POLITICS
FEDERAL / STATE
RELATIONS
Recent tax environment
• Build-up of ‘announced but
un-enacted measures’
• Board recommendations and regulatory
reform ideas ‘caught in the middle’
2
29/02/2016
Recent tax environment
• Structural tax reform debate mired in political
deadlock
• Henry review recommendations outstanding
• Tax is a component of broader economic policy
Newton’s views on taxation reform
#1 A stationary object will only move if pressure
is applied to it.
#3 For every action there is an equal and
opposite reaction.
3
29/02/2016
A revised Board approach to support
better decision making
• Board of Taxation has
been changing to keep
pace and support better
decision making
• “Real time” policy
advice as decisions are
being made
• New consultation
model
Recent Board activities
Innovation
Statement
Announced but unenacted measures
Anti-hybrid Rules
Tax
reform
Small Business
Package
Regulation
Reform
Budget
Measures
Review of R&D
incentives
Tax
Transparency
Code
Tax Impediments
to Small Business
Tax consolidation
4
29/02/2016
Board’s Tax Policy Development
Working Group
•
•
•
•
•
•
•
•
•
•
•
•
•
Michael Andrew (Chair, Board of Taxation)
John Emerson (Herbert Smith Freehills, Deputy Chair of the Board of Taxation)
Andrew Mills (Second Commissioner, ATO) (representing Commissioner Chris
Jordan, Board member)
Peter Quiggin (First Parliamentary Counsel, Office of Parliamentary Counsel,
Board member)
Andrew England (First Assistant Commissioner, ATO)
Tom Reid (Division Head, Law Design Practice, Treasury)
Michelle de Niese (Executive Director, Corporate Tax Association)
Stephen Healey (2015 Tax Institute President)
Professor Valerie Braithwaite (Australian National University)
Justice Garry Downes (retired)
Peter Achterstraat (former NSW Auditor-General)
Alf Capito (Partner, Ernst and Young)
Jane Michie (Head of Group Tax, BHP Billiton)
Building the path to tax reform
Focus areas for Working Group
• Improving tax policy development
• Building consensus for long-term tax reform
• Reducing complexity
5
29/02/2016
International Comparisons
UK approach
• Office of Tax Simplification
• Tax policy development process
• Corporate Tax Road Map
New Zealand approach
• Generic Tax Policy Process
• Principles-based framework
• Tax Working Group
Complicating factor #1
Unutilised opportunities to harness new media
6
29/02/2016
Complicating factor #2
Multinational taxation / tax avoidance
• Board of Tax work on implementation of OECD
anti-hybrids recommendations
• Board’s “Voluntary Tax Transparency Code”
Complicating factor #3
An ever-changing global economy
7
29/02/2016
Complicating factor #4
Out-of-date tax policy development process
• Opaque decision making
• Insufficient resources
• Delays in spotting emerging trends
• No established
respected tax advocate
• Fragmented governance
Complicating factor #5
Causes of complexity
• Widely drafted antiavoidance rules
• Demand for detail in
legislation
• Cost of complexity
hidden
8
29/02/2016
Board recommendations
• Commit to a set of core tax policy principles
Board recommendations
Adopt a tax policy
development
framework to
articulates roles,
responsibilities and
expectations
E.g. More effective
consultation, ban on
retrospective
legislation, clarify
objective of legislation
9
29/02/2016
Board recommendations
• Optimise resource investment and accountability in tax
policy development
Board recommendations
• The ‘Sounding Board’
• Once-a-year Bill sponsored by the Board of Taxation
10
29/02/2016
Board recommendations
Institutional clarity
• Using the Board of
Taxation’s expertise and
networks more widely
• Clarify roles of
institutions in the tax
policy space
• Tax Reform
Commission??
Role of the tax profession
• Articulate opportunities and proactively contribute
to tax policy debate
• Be aware of community expectations
• Service to tax system: raise issues that contribute to
continuous improvement and drive national
objectives e.g. growth, investment etc.
11
29/02/2016
Board recommendations
Reducing tax system complexity
• Tailored proportionate response to integrity concerns
• ATO advice drafted concurrently with laws – as the norm
• Greater use of safe harbours
• Accounting standards as starting point for business tax
policy options
• Expand the
Commissioner’s
Remedial Power
We want to hear from you!
Online:
www.taxboard.gov.au
Email:
[email protected]
Phone:
(02) 6263 4366
24
12