SC issues notice to government on new property tax system | Vijayawada News

Vijayawada: The High Court on Tuesday issued notices to the government in the filed petition challenging the state’s new property tax system. The taxpayers’ association has asked the High Court to challenge the new property tax regime in which tax is levied on the capital value of the property instead of annual rental income. The government recently released GO 198 to introduce the new property tax and vacant land tax regime in urban local communities.
Lawyer Sunkara Rajendra Prasad, arguing on behalf of the petitioners, told the judiciary headed by Chief Justice Arup Kumar Goswami and Judge Ninala Jayasurya that the amended Municipalities Act of Andhra Pradesh violated constitutional principles and democratic. He also supported the process of rolling out the new tax system without giving people the opportunity to submit their grievances.
While objections were called amid the Covid-19 pandemic, many people were reluctant to travel to municipalities to submit their grievances, he said, adding that although representations were made to provide of alternative platforms such as the online submission of objections, officials did not consider the requests.
Government litigator for municipal administration, G Shivaji, argued that the state government brought the amendment in line with the recommendations of the Union government, which proposed to have a uniform tax policy. across the country and has published guidelines on this. The state government only followed the recommendations, he said. Given all of the arguments, the High Court asked the state government to file cross-affidavits in the petition and released the case for a new hearing after eight weeks.
Lawyer Sunkara Rajendra Prasad, arguing on behalf of the petitioners, supported the process of rolling out the new tax regime without giving people the opportunity to submit their grievances.

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Does America’s Tax System Willfully Favor the Rich?


Who’s cheating on Uncle Sam the most these days? Earlier this year, two IRS researchers joined economists from Carnegie Mellon, the London School of Economics and the University of California at Berkeley to explore this question.

According to these analysts, Americans at the top and bottom of the income scale do not report all of their income. But the level of non-reporting varies enormously. Among Americans belonging to the poorest 50% in the country, only 7% of income goes unreported. In the top 1%, it’s almost 20%.

What is happening here? Or is it just deeply but unintentionally flawed?

This is a complicated question. But as a tax lawyer, I firmly believe that the flaws are intentional. Let’s take a look at the evidence.

Most of us don’t have the ability to exclude income from our tax returns. Our employers report all of our wages and salaries on W-2 forms. Our financial institutions declare interest on our savings and dividends on our 1099 shares.

But the type of income that many comes up with at the top of our income scale – business income from partnerships and other special categories of business enterprises – usually doesn’t appear on any form that needs to be filed with the IRS. .

In other words, we have a tax system with a built-in loophole in reporting information. This certainly counts as a major flaw.

An intentional fault? Maybe, but it’s debatable. So let’s take a look at the recent dramatic drop in IRS audit rates on the nation’s wealthiest.

Audits on revenues over $ 1 million have fallen by 71% since 2010, says the Center on Budget and Policy Priorities. This drop reflects fairly substantial cuts to the IRS budget – a 19% hit since 2010 – and what could be more intentional than budget cuts?

Some might argue that the drop in auditing on high-income earners may simply reflect the inevitable complexity of their returns, which can include all kinds of business entities and trusts.

But if you keep digging, there is still compelling evidence that our tax system is rigged: Tax Code Section 6707A. Nothing in our tax code is more like rig by design.

Section 6707A of the tax code imposes a penalty for failing to disclose a “listed transaction,” essentially any transaction that the IRS identifies as an abusive measure to avoid taxes.

The sanction for violation of article 6707A? An amount equal to 75% of the tax that a taxpayer sought to avoid through the transaction, even if the transaction itself is considered legitimate. Failure to disclose also gives the IRS unlimited time to verify reports of listed transactions, not just the regular three years.

Sounds like a squeeze for shady declarers, doesn’t it? Those who engage in listed transactions may disclose their abusive transactions in their tax return, a decision that will almost certainly trigger an audit. Or they can omit disclosure and risk a huge penalty.

But there is a catch. Section 6707A carries a maximum penalty. No person who fails to disclose a listed transaction can be fined more than $ 100,000.

Think about it for a moment. For a person who engages in a listed transaction to avoid multi-million dollar income tax, the penalty limit in Section 6707A essentially imposes no deterrent to tax evasion.

If you’re trying to avoid $ 50,000 in tax, the threat of a penalty of $ 37,500 on top of the tax owed will be intimidating. But if you’re trying to avoid $ 3,000,000 in taxes, that threat of a $ 100,000 penalty is insignificant. Without the possibility of a severe penalty, even the indefinite audit risk becomes much less threatening.

The bottom line: Section 6707A undoubtedly rigs our tax system in favor of the ultra-rich. What good policy could be served by intentionally limiting the exposure to penalties of very wealthy taxpayers and no one else? I can’t think of one.

Could the intentional rigging of the tax code in favor of the rich be limited to this one obscure sanction provision? Do you want to buy a bridge?

Bob Lord is a tax lawyer and associate researcher at the Institute for Policy Studies.

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RBF Announces Work Hours Extension to Facilitate Income Tax Filers

– APP / File
  • FBR indicates that the affected offices will remain open until midnight on September 29 (Wednesday) and September 30 (Thursday).
  • The deadline for filing tax returns is September 30.
  • The FBR online portal for those wishing to file their returns online has encountered errors on its server.

The Federal Board of Revenue on Tuesday announced an extension of the working hours of its offices to facilitate income tax filers.

According to a statement from the tax administration, the relevant offices will remain open until midnight on September 29 (Wednesday) and September 30 (Thursday).

It can be noted that the FBR online portal for those who wish to file their declarations online has encountered errors in its server, causing immense difficulties for people.

The Pakistan Tax Bar Association has requested an extension of the deadline for filing tax returns.

The deadline for submitting tax returns is September 30, and the RBF has refused to extend the submission date.

Last week, in response to reports of an alleged extension of the date, RBF spokesperson Asad Tahir categorically denied that this was the case, saying no proposal in this regard had been considered at the meeting. headquarters of the FBR.

In an informal conversation with reporters, Tahir said: “So far 0.8 million people have filed their statements.”

He added that no strict action will be taken against merchants, but said that after 15 days, show cause notices will be issued to merchants who do not have point-of-sale (PoS) systems installed.

“Failure to install PoS will result in a fine of 500,000 rupees after 15 days,” the spokesperson said, adding that if traders apply PoS within 15 days, the fine will be waived.

Tahir added that failure to install PoS after one month will result in a fine worth Rs3 million. “Closing down businesses will be the last resort,” he added.

Earlier this month, the RBF advised all taxpayers required to file tax returns by September 30, 2021 to fulfill their legal obligation without waiting until the last date to avoid system delays that occur. when a large number of taxpayers log on to submit returns near the deadline.

FBR also clarified at the time that there would be no extension of the deadline for filing tax returns.

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VAT controversy: Fayemi says Nigeria’s tax system is problematic

Fayemi said the forum believed the VAT controversy required political and legal action to be resolved.

“But our view is that the Supreme Court should expedite its decision so that we are clear on who should be responsible for value added tax (VAT), whether it is the Federal Inland Revenue Service or the states.

“The states that have gone to court clearly believe that this responsibility evolves, according to their own understanding, on what the Constitution says.

“The important thing is that our tax system is problematic, confusing and contradictory. We need to do a lot more to clarify things so that this can make way for more efficient and effective tax collection ”, said Fayemi.

The governor also stressed the need to channel the borrowed funds to regenerative businesses that would strengthen the country’s economy and generate more jobs for citizens.

He said there was nothing wrong with the president’s recent call Muhammadu Buhari for a downward revision of the nation’s debt portfolio, due to the current revenue challenges facing the country.

“President Buhari’s administration is to be commended for the use of the borrowed money. It used these funds more for infrastructure development than for consumption, which contributed to economic growth.

“Clearly, it would be nice not to borrow, but it would also be good to redirect the funds we have to the regenerative sectors of our economy.

“In reality, we have an income problem that has not allowed us to build an economy that meets the aspirations of Nigerians.

“I don’t think there is anything wrong with the president, as a major voice in international affairs, especially in Africa and the black world, calling for a review of management and arrangements debt”, he said.

The NGF chairman also called for a comprehensive approach that would complement the national security response strategy by addressing the lingering security challenges facing the nation.

The ultimate challenge, he said, was that we had to tackle insecurity not just state by state.

“Security is an ongoing issue on the agenda of our state and as governor. Ekiti is a state located on the outer border of northern and southern Nigeria, to the right of Kogi and Kwara states.

“Some of the things that are happening in the northern states impact our security in Ekiti state just like all the other states around us and clearly.

“I have argued in the past that there is an inexplicable link between the fallout from insurgency and banditry in the northeast and northwest and the kidnappings we are seeing in parts of the south.

“Our duty is to make sure that we protect the citizens under our watch and we have tried to do so consistently.

“We have set up joint security initiatives between traditional security institutions like the police and the military, as well as our own local security base.

“The fight against insecurity must go through a comprehensive approach that will complement the national security response strategy and reduce this scourge that we know in the country”, he said.

Lending his voice to the new Oil Industry Law, the NGF Chairman said: “We do not believe that the Ministry of Finance (incorporated) and the Ministry of Petroleum Resources should be the sole owners of the company. from the Petroleum Law. .

“We believe that the entire petroleum institution is the product of the federation and not just of the federal government.

“And, we have suggested that the only body that belongs to the federal, state and local governments be the Nigerian Sovereign Investment Authority of which we (the states) are all shareholders.

“And, if it’s held in trust by the AMF, then we’re much more comfortable seeing it as a federation business rather than a federal government business.

“The second concern we expressed concerns the exhaustion of the federation’s account by the various percentages that have been reserved for border states and communities receiving the petroleum product. Without prejudice to what the host communities deserve ”, he said.

In the general election of 2023, Fayemi predicted the victory of the APC.

He said: “conflicts will always happen. The APC is a big Party with different tendencies and there will be arguments for and against.

“We are very confident that this party will produce the next government of this country in 2023, but before we get there, we are focusing more on the country now.

“The Party is more interested in the stability and security of Nigeria. What’s going on internally is something we’ll be fixing internally,” he said.

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How to determine your adjusted gross income?

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If you want to be a model citizen, you have to pay your taxes on time. This is one of the things that allows you to have many other benefits. And when you say taxes, you may have heard of the term adjusted gross income. Well, this is an important phrase to understand because it will help you figure out how much tax you have to pay. If you don’t understand it, you may end up paying more tax than you have to.

What is Adjusted Gross Income (AGI)?

Adjusted gross income commonly known as AGI is your annual gross income after subtracting a few items. This exact number would determine how much you have to pay in tax. The Internal Revenue Service (IRS) will use all of the data to determine your income tax for the year and then give you an Adjusted Gross Income (AGI) number.

Depending on the percentage of your AGI, the IRS may make some personal deductions and also grant you some exemptions.

AGI can also affect your tax deduction and play an important role in your retirement plans.

The sum of all the money you have earned in a year that includes salaries, capital gains, dividends, interest, royalties, rental income, and retirement distributions is your gross income. However, AGI will make some adjustments to your gross income which is the sum of all the money to reach the number that will determine your tax payable for that particular year.

How to calculate your Adjusted Gross Income (AGI)?

Whether you run a successful business or consider yourself among independent contractors, you have to pay your taxes, so you have to calculate your adjusted gross income (AGI). After you have calculated the AGI, you will be able to determine your tax payable for the year. But the math seems a bit difficult. For your convenience, here we’ll share some tips on how to determine your adjusted gross income. So let’s get right to the point.

Before calculating your AGI, you need to analyze the items that must be filed for a tax return. This could include your property, your business, your royalties, your net income and many other things like that. If you are unsure of what to record, you can get help on the Internal Revenue Service (IRS) website. The IRS provides an interactive tax assistant who can answer your questions on the spot and help you with your tax filing process.

Steps to calculate your adjusted gross income (AGI)

To simplify the process, we have explained them in the form of several points here.

  1. To do your AGI calculation, you will need to determine your total gross income for the year. This could include your salary and other income from self-employment businesses, dividends, and retirement income.
  2. Having a list of all income is not enough, you must have tax returns for each income to prove that you are earning that much from one source. Have pay stubs produced by the payslip generator would suffice if they showed the name of the company.

Income can take the following forms:

  • Business income
  • Income by growing your own crops
  • Taxable refunds and local taxes
  • Disability benefits
  • Jury fees / compensation
  • Security deposits
  • Rental income
  • Prize / prize money
  • Play money /
  • Lottery
  • Make Money Through Lawsuits
  • Spousal support
  • Unemployment benefit
  • Capital gains
  • Union strike pay
  • Severance pay
  • Income from rental real estate partnerships or corporations, trusts and license payments
  • Royalties from your previous work, etc.
  1. Income earned from traditional wages and salaries should be reported on Form W-2, but if you earn income from a self-employment business, it should be reported on Form 1099.
  2. Form 1099 has a few sections to report different categories. Brokerage and barter expenses must be reported on Form 1099-B. Any proceeds from real estate transactions can be reported on Form 1099-S. Taxable interest can be declared on Form 1099-INT and all investment dividends can be declared on Form 1099-DIV. However, one thing needs to be clarified that all of these entries on Form 1099 are all part of your taxable income.
  3. Once all of your income is listed you need to add them all together and then you are allowed to subtract a few amounts that are not taxed. These revenues include:
  • Workers’ compensation benefits
  • Disability payments
  • Child support benefits
  • Host family payments
  • Life insurance proceeds
  • Money received as a gift
  • Inheritance of money or assets
  • Scholarships or scholarships
  • Retirement money
  1. Some of the winnings amounts are deductible and some of them are mentioned here.
  • Self-employment tax deduction

If you are self-employed and pay tax, then you will be eligible for a credit from the IRS by claiming the self-employment tax deduction.

  • Classroom expenses for teachers and educators

If you are a teacher, counselor, or assistant who teaches in a K-12 school, you can claim $ 250 for unreimbursed work-related expenses in each tax year.

  • Self-employed workers’ health insurance deduction

For the self-employed, they can cover the entire amount spent on premiums through the self-employed health insurance deduction. Sometimes these health insurances also cover your spouse and children.

  • Personnel enrolled in the armed forces

People who are drafted into the armed forces in any capacity are also entitled to some deductions. These can be related to early withdrawal penalty amounts, student loan interest, etc.

  1. Some people are confused between the modified AGI and the AGI. Just know that almost all independent adults are entitled to AGI and to pay taxes. However, for the modified AGI, you must be eligible for items such as contributions to Roth IRA and others.
  2. The IRS recommends that you do it yourself even if you are not eligible for any tax, as registering could give you credits and even benefits and it could be beneficial to you.

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Income tax reform in Brazil: interest on extinguishment of equity

In September 2021, the Brazilian House of Representatives approved the Income Tax Reform Bill (Projeto de Lei ‘PL’ n ° 2.337 / 2021) under discussion in the Brazilian Parliament. This is not a final version, as it still depends on Senate approval and ratification or presidential veto to come into effect.

It should be noted that the dividend tax rate has been set at 15% (currently the Brazilian system only taxes income as profits, at the corporate level; the participation exemption is in effect, in generally since 1996), but the legislative proposal includes many other different changes in the Brazilian income tax system (personal income tax and corporate tax).

The aim of this article is to analyze one of these other changes: the extinction of the so-called “interest on equity” (IOE) tax system. This article provides a brief overview of the origins of this tax category, as well as the implications its extinction could have on national and international taxation, impacting corporate tax strategies that may need to be reassessed.

The OIE payment rules and its history

The tax regime of the OIE appeared in the Brazilian legal system through Law No. 9.249 / 1995 (a federal law) as an alternative to the remuneration of capital in relation to dividends; it is therefore a sort of “distribution of benefits”.

In short, it granted the possibility to companies operating under the Lucro Real tax regime (taxation of real profits, on the basis of accounting books) to pay interest on the equity of the companies at a given rate (TJLP). This payment is deductible from the corporate tax base, taxable profit (taxed in full at the rate of 34%), on the one hand, but this payment is subject to withholding at the rate of 15%, considered as a tax on the beneficiary of the interest (the shareholder).

This possibility has allowed a better return on the capital invested in Brazilian companies and induces the capitalization of companies by its shareholders. In other words, such a regime induced the financing of companies by equity instead of shareholders instead of debit from third parties. It is out of the question that this financial instrument was created to encourage the expansion of business activity by increasing equity, rather than debt.

The strategy then consisted of aligning the opportunity cost with that of the company’s other creditors. In other words, the tool has a very simple objective: to discourage companies from seeking resources in the financial market, which can rely on the capital of their owners. This could improve the financial health of Brazilian companies. In addition, the objective of neutrality vis-à-vis the source of funding is another hallmark of this regime, since interest in Brazil is generally taxed at 15% at source.

IOE qualification on TNT

From a legal point of view, this instrument has a hybrid character, since the OIE holds both rights and obligations typical of own funds and third party capital. This point alone already brings a multitude of complexities to the treatments accorded by national tax law, but the difficulty is even greater in the international scenario, including its qualification for the purposes of interpretation and application of tax treaties. double taxation (DTC) signed by Brazil.

It should be noted that TNTs use a schedule structure. They divide the items of income into categories, according to an autonomous qualification, in order to distribute the taxing rights among the contracting states. For this reason, they do not take a general and comprehensive consideration of the result. And then the question arises: in which category does IOE belong?

In a preliminary analysis, two possibilities arise for qualifying IOE taking into account the income categories adopted in the OECD model for tax treaties:

  • Interest, provided for in article 11 of the Model, if typical aspects of third party capital are taken into account; Where
  • Dividends, provided for in Article 10 of the Model, if typical aspects of equity prevail.

The difference in categorization leads to the application of different rules for the taxation of this type of income in international transactions: either by mechanisms adopted by the State of residence to avoid double taxation, or by the form of taxation by Source state.

It is important to mention that, contrary to what is adopted in the current model of the OECD, Brazil, in general, uses in its DTAs, for the definitions of dividends and interest, discount clauses integrating into domestic law. . In other words, for the construction of the two concepts, it must be observed that the income should be treated by the treaty in the same way as it was under the tax legislation of the State where the company which received it. payroll is a tax resident.

However, in some cases, the OIE may be qualified in one or the other category depending on the wording adopted in the relevant TNT. Although, after the publication of Law No. 9 249/1995, Brazil adopted an explicit provision in its treaties to qualify the JCP as an interest.

It was done by means of protocols concerning almost all of the TNTs signed thereafter. The only exceptions were the protocols annexed to the DTAs with Finland and Uruguay. It is important to mention that this type of protocol was not annexed to the treaties signed before the publication of the law n ° 9,249 / 1995.

extinction of the OIE

While this qualifying discussion is relevant in determining the tax rules applicable to IOE’s cross-border outbound payment from Brazilian companies, it represents some sort of tax advantage in most cases. For this reason, this form of return on capital has become very common in national and international business structures.

The extinction of the possibility of paying IOE in Brazil provided for in the tax reform under debate, if confirmed, would require the reassessment of general tax strategies regarding the distribution of income of Brazilian companies in many cases. For this reason, we highlight this possible modification of the law which will have a significant impact on the business practices related to Brazil.

Paulo Victor Vieira da Rocha

Partner, VRBF Advogados

Marina da Silva Fernandes

Partner, VRBF Avocats

Murilo Jakuk Ferreira Lopes

Partner, VRBF Avocats

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ITR 2021: the best apps to file an online tax return

The government has extended the deadline for filing an income tax return (ITR) for tax year 2021-22 to December 31, 2021. The deadline for submitting the late / revised return for the year d ‘imposition 2021-22, which was prior to December 31st, 2021 has been extended until January 31st, 2022, is now extended until March 31st, 2022.

“The penalty for RTIs provided on or before December 31st is Rs 5,000, but doubles that amount for subsequent returns. However, if your taxable income is less than Rs 5 lakh, the maximum penalty will be Rs 1,000. On the other hand, if the evaded tax exceeds Rs 25 lakh, the penalty could be from 6 months to 7 years, ”according to the website of the Income Tax Department.

Here is a list of the best apps on Android and iOS for easy RTI filing online.

All India ITR:

All India ITR is a certified government e-intermediary. It offers a 100% paperless process and is available on Android and iOS. Users can simply upload images or PDFs of their Form-16 and other documents, after which the system automatically reads the entries and the forms are automatically completed, making it easy to file your RTI on the go.

Clear tax:

Clear Tax is one of the most used tax apps in India. The Clear Tax app asks users to select and download an appropriate form to file the computer return based on the responses. It allows user details from 26AS and 16 forms to be imported into the application, making it easier to file a computer declaration. It is easy to file an RTI using the Clear Tax app.

H&R Block:

You can also use H&R Block’s MyBlock app to file your income tax returns. It also affects tax experts if your ITR is complex and you find it difficult to file H&R is a good option. Tax experts are appointed after judging the complexity of an IT declaration. H&R Block offers a secure tax safe, tax savings, hassle-free filing experience, accuracy and transparency.

Tax smile:

The Tax Smile app is designed to help yourself. It frames intuitive questions that have been created with in-depth tax law details in mind. Tax Smile provides tax knowledge, accuracy, fast filing, security and post-filing assistance. The app calculates the taxes owed for free and only charges when the income tax is filed.

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Nigeria’s problematic, confusing tax system – Govs

• Said NGF awaiting the decision of the Supreme Court

GOVERNOR Kayode Fayemi of Ekiti State said yesterday that the Nigerian Governors Forum, NGF, is awaiting the Supreme Court ruling on value added tax, VAT and collection.

Fayemi, who is also the chairman of the NGF, said Nigeria’s tax system was not only problematic, but also confusing and needed special attention.

Speaking in an interview with Arise Television yesterday, Fayemi said governors are awaiting the outcome of the case instituted by some state governors.

He said the Governors’ Forum is currently reviewing the issues and consulting on the implications of the fundraising for state governments.

The governor said: “For us at NGF this is an issue that we are looking at both legally and politically. We ask our experts to help us consider the implications for states.

“Our point of view is that the Supreme Court should expedite the decision on this matter, so that we are clear on who should be in charge of VAT – whether it is FIRS or the States. We will wait for the Supreme Court to rule on this.

“The important thing is that our tax system is problematic, confusing and contradictory, and we need to do a lot more to start clarifying things, so that we can have more efficient ways of collecting taxes.”

Regarding President Muhammadu Buhari’s calls for debt cancellation at the United Nations General Assembly, Fayemi said the federal government borrowing was for reasons and was for specific loans.

He said: “Nigeria borrows for specific reasons. Most of what we borrow is specific. If you look at what we borrow, you will see that these are specific and very attractive loans.

Noting that the borrowing was in line with World Bank and IMF standards, the NGF chairman said, “On the other hand, you have the Chinese infrastructure loans.

We can now ask ourselves if we should be using 97% of the debt service. It is a debate that we can have.

“The problem is, why are you borrowing. Do you borrow for consumption or for infrastructure development? Buhari is to be commended for this.

“The question is, we have income problems… borrowing is a win-win situation for our country and our economy.”

Recall that the Southern Governors Forum had supported the collection of VAT by the states, and not by the Federal Inland Revenue Service, FIRS.

Recall also that the states of Rivers and Lagos had promulgated laws for the collection of VAT, as the Court of Appeal had ordered that the states maintain the status quo, pending the decision of an appeal filed by the FIRS.

The Rivers State government also asked the Supreme Court to overturn the Court of Appeal’s order to allow states to continue to collect the tax, known as consumption tax.

Breaking News Nigeria

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Sir Keir Starmer refuses to rule out income tax hike, promising fairer system

All three positions raise the prospect of Sir Keir running in the May 2024 general election by proposing to raise the overall level of taxation in the UK.

Mr Johnson’s decision to break the Tory manifesto pledge not to increase national insurance in order to pay for welfare reforms and increased NHS spending have pushed the tax burden to its highest level since the post-war years.

Ms Reeves had previously told the Sunday Times that she had “no plans” to increase income tax, adding: “I think people who derive their income from wealth should have to pay more.”

A Labor press release explaining the party’s new tax stance says there are up to a thousand different tax breaks that are collectively worth at least £ 174 billion a year.

The statement specified two reliefs that would be removed – the tax break for schools deprived of their charitable status and a tax break for private equity managers.

Non-domiciliary tax status, which allows someone to pay less tax if they live abroad, and tax breaks for investments in venture capital trusts have also been identified as areas to focus on. examine.

Focus on tax relief

The statement said VAT exemptions for food would be maintained, but it was not yet clear what other tax breaks would remain in place.

A Labor source has played down the possibility of changing the pension tax break.

Ms. Reeves will say, “There are hundreds of different tax breaks in the system.

“Some are important, but too many of them just offer loopholes for those who can afford the best advice.

“For businesses, they create additional layers of complexity to navigate, and added together they cost more than our entire NHS budget.

“We will look at every tax break. If it is not profitable for the taxpayer or the economy, we will remove it.

“Labor will tax fairly, spend wisely and run our economy at full capacity.”

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Ken Henry denounces the “unsuitable” tax system

“All the other tax bases of the federation are not reliable from the tax point of view,” he declared.

He said the GST base is eroding, fuel excise taxes are threatened due to the electrification of the vehicle fleet, stamp duties are volatile, and the collection of fuel taxes is under threat. Corporate tax depends on the price of iron ore.


He wants the government to rely less on traditionally levied bases by the Commonwealth, such as income tax, and focus more on royalties typically levied by the state on consumption, road use, land. and other natural resources.

“In many ways, we find ourselves where we were in the decades following World War II. It was a period characterized by unruly, partially funded, public spending with heavy reliance on fiscal brakes that punished innovation, enterprise, and effort, distorted the savings model, and rewarded tax avoidance and evasion, ”said Dr Henry.

“Counting on the tax brake to do its magic in the face of a mountain of public debt is understandable, but we must also understand that it is dangerous.

Failure to engage in reform would hurt economic growth, deprive people of opportunities, reduce available services and continue to generate intergenerational inequalities, he said.

Australian Banking Association chief executive and former Queensland Premier Anna Bligh, who was also speaking at the event, warned that there were difficult political realities to overcome for reform to be achieved.

“You are always going to have (…) a prime minister or a prime minister or several who have very little political capital even if they are far from an election,” Ms. Bligh said. “Their willingness to embark on something big or brave will always be limited. “

She said it was essential to consider mechanisms to remove it from political cycles and also urged to reconsider extending the federal government’s three-year term to four years. It would require a referendum. “If you want long-term thinking, even an extra 12 months helps,” she said.


Deputy Treasury Secretary Maryanne Mrakovcic said successive governments have understood the problems of the fiscal restraint and acted to reduce the burden on workers.

“This is why over the past 30 years, as taxes have risen as a percentage of GDP due to rising average tax rates, successive governments have returned the tax burden to Australians in the form of tax cuts. ‘taxes.

“And this is a political practice pursued by the government through its recent personal income tax plan.”

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