Senators urged to reject ‘harmful‘ super tax bill: CA ANZ
The government will fail to protect Australian farms, investors and small business owners if the super tax bill is to be passed, CA ANZ has warned.
CA ANZ is calling on senators to vote against the super tax bill as it believes people should not have to borrow money to pay taxes.
If the legislation were to be passed, now scheduled for 13 February, it could see individuals with more than $3 million in superannuation assets being forced to borrow money or sell assets to pay tax bills.
The Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023 would double the super earnings tax from 15 per cent to 30 per cent for super accounts with more than $3 million.
CA ANZ said this would unfairly penalise Australians who had been advised and constantly encouraged to keep their assets in their super fund.
CA ANZ CEO Ainslie van Onselen said the bill sought to tax unrealised gains, which would be a first for the Australian tax system, setting a precedent for the future.
“Hard-working Australians could be forced to take out a loan or sell their hard-earned assets just to pay a tax on a gain that is a profit on paper only,” she said.
“If the government intends to tax unrealised gains, then for consistency, it should also provide a tax refund for unrealised losses.”
According to the professional body, if a farmer whose SMSF owned their $2 million farm and the farmer had not made any super contributions or withdrawn any money from the fund during the year, then the value of the farm would have doubled and the tax owed would equate to $37,500.
Van Onselen said that based on this example, the government should not expect anyone to have an extra $37,500 sitting in the bank for an unexpected tax bill.
The $3 million cap contained in the bill would not be indexed, which would mean more and more taxpayers would be caught by the imposition as years progressed, she said.
“There remains uncertainty and complexity as to how this policy will impact defined benefit schemes, prevalent among public sector workers, and the constitutionality of this policy as it relates to judicial pensions.”
“CA ANZ believes this tax will be very expensive for individuals, superannuation funds, tax agents, financial advisors and the ATO to administer, and will raise little, if any, net revenue when all these costs are considered.”
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