{"id":1361,"date":"2012-05-15T14:17:57","date_gmt":"2012-05-15T04:17:57","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=1361"},"modified":"2012-05-15T14:37:58","modified_gmt":"2012-05-15T04:37:58","slug":"personal-tax-simplifie","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2012\/05\/personal-tax-simplifie\/","title":{"rendered":"Personal Tax: Would a Simplified System Make Everyone a Winner?"},"content":{"rendered":"<p><strong>Chris Evans|Knowledge@ASB<\/strong><\/p>\n<p>Who would be the winners and losers if Australia simplified its tax system? As tax time looms, many Australians with relatively simple tax affairs are once again preparing to file a return in the hope of receiving at least a small sum back. And accountants and tax agents also are bracing for the annual onerous round of compliance activity on their behalf. But it doesn\u2019t have to be like this! In the UK and New Zealand, the personal tax system has been simplified, so most \u201cwage slaves\u201d who are taxed at source no longer need to fill in a return. While taxpayers are spared the obligation for frequently negligible returns, accountants are able to focus on the more interesting activities of adding value and creating greater wealth for clients. In an interview with Julian Lorkin of Knowledge@Australian School of Business, <a href=\"http:\/\/www.asb.unsw.edu.au\/schools\/Pages\/ChrisEvans.aspx\" target=\"_blank\">Chris Evans<\/a>, professor of taxation, outlines why the case for simplified tax adds up.<\/p>\n<p>An edited transcript of the interview follows.<\/p>\n<p><iframe loading=\"lazy\" title=\"Chris Evans: Simplifying Australia&#039;s Personal Tax System - Knowledge@ASB\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/64gz3qhut14?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>Knowledge@Australian School of Business:<\/strong> Many people loathe tax time, having to fill in a tax return every year and go along to an accountant. Is there an easier system?<\/p>\n<p><strong>Chris Evans:<\/strong> In many countries in the world you don\u2019t fill in a tax return. Take the UK or New Zealand, for example, very few taxpayers in those countries have to fill in returns. It\u2019s only taxpayers with more complicated tax affairs that have to complete and submit an annual return. Otherwise the tax system takes the right amount of tax at the right time during the year. At the end of the year, you neither owe money to the taxman, nor are you owed money.<\/p>\n<p>In Australia, we could look at changing our system away from what we call comprehensive filing, in which everybody has to file a return, into one where there\u2019s much more selective filing \u2013 only those with more complicated affairs need to submit a return. Those of us who are straightforward \u201cwage slaves\u201d, that is, people who have only employment income and have had the right amount of tax taken at the right time during the year would have nothing more to worry about.<\/p>\n<p><strong>Knowledge@Australian School of Business:<\/strong> I\u2019ve been talking to Michael D&#8217;Ascenzo, the commissioner of the Australian Taxation Office, and he was saying that people enjoy filling in a tax return simply because they get money back as a result. They consider it almost like Christmas when they get the cheque in the post.<\/p>\n<p><strong>Chris<\/strong><strong> Evans<\/strong><strong>:<\/strong> That\u2019s a rather strange way of looking at it. I don\u2019t prepay my electricity so that I can enjoy getting money back at the end of the year. Why would I enjoy prepaying my tax, paying it before I need to and then getting a nice cheque back at the end of the year? It used to be a tradition in Australia that those cheques, the tax refunds, paid for the annual holiday, or the fridge, or something big. From the commissioner\u2019s point of view, he\u2019s obviously interested in getting everybody to submit a return because it\u2019s sort of command and control and it means you know what\u2019s going on. But the point is the tax office already knows most of that information anyway because the employers have sent in the amount of tax that they have deducted. If they wanted to, the tax office could find the information from the banks about the amount of interest that\u2019s been paid to taxpayers, or from companies the amount of dividends that have been paid. So, a lot of the information is already there in the tax office. It seems very strange that they want us to then send in an annual return and confirm most of what they already know. It would be much simpler just to wash us out of the system.<\/p>\n<p><strong>Knowledge@Australian School of Business:<\/strong> Tax professionals argue that not only would thousands of them be out of work if we adopted the UK system, but also that people love finding ways of claiming back just a little bit of extra tax \u2013 and, effectively, that fun would go out of the system.<\/p>\n<p><strong>Chris<\/strong><strong> Evans<\/strong><strong>:<\/strong> That\u2019s interesting because tax agents would be concerned about the loss of work. But we did this national survey with accountants about four years ago, and a lot of them said: \u201cYes, get this trivia out of our lives and let us get on with what we\u2019re supposed to be doing, which is adding value to the businesses\u2019 and to personal taxpayers\u2019 wealth, rather than having to deal with everyone\u2019s little refund each year.\u201d The tax agents who do nothing else may well be losers and we would no longer have this same tax agent dependency that we have currently in Australia, but a lot of other tax agents and accountants would be able to get on with some serious value-adding work, rather than wasting time on petty compliance.<\/p>\n<p><strong>Knowledge@Australian School of Business:<\/strong> Can we assume that if we scrap the annual tax return, then the cost for individuals will go down? While people may not be claiming so much back, they would actually be paying less tax upfront?<\/p>\n<p><strong>Chris<\/strong><strong> Evans<\/strong><strong>:<\/strong> We\u2019d be paying less to external advisors, and if we cleaned out and simplified the system we\u2019d probably be paying less tax \u2013 so there could be a win-win all around.<\/p>\n<p><strong>Knowledge@Australian School of Business:<\/strong> I\u2019m sure many people are crossing their fingers hoping that we will change the system<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chris Evans|Knowledge@ASB Who would be the winners and losers if Australia simplified its tax system? As tax time looms, many Australians with relatively simple tax affairs are once again preparing to file a return in the hope of receiving at least a small sum back. And accountants and tax agents also are bracing for the [&hellip;]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12758],"tags":[12739,14636,14637,12697,14667],"class_list":["post-1361","post","type-post","status-publish","format-standard","hentry","category-taxation","tag-australia","tag-personal","tag-system","tag-tax","tag-taxation"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=1361"}],"version-history":[{"count":17,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1361\/revisions"}],"predecessor-version":[{"id":1368,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1361\/revisions\/1368"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=1361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=1361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=1361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}