Personal tax system ripe for reform

Australian personal taxpayers overwhelmingly support the need for reform of the personal tax system, according to a new survey conducted by the Australian School of Taxation (Atax) at UNSW.

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Australian personal taxpayers overwhelmingly support the need for reform of the personal tax system, according to a new survey conducted by the Australian School of Taxation (Atax) at UNSW.

The results of the survey of nearly 4,000 individuals, which was presented at a Personal Income Tax Reform Symposium held at UNSW this week, found that taxpayers regard the current system as unfair and overly complex and would even be prepared to forego some of the major concessions currently available, such as work-related expenses and the preferential treatment of personal capital gains, in return for lower tax rates and increased simplicity across the board.

Surprisingly, over 70 percent of those surveyed also said that they would be willing to forego tax cuts in favour of increased social spending if the Federal budget was running at a surplus.

Professor Chris Evans, leader of the Atax research, said he was surprised at the extent of the support for personal tax reform. "We found that two out of three respondents considered that personal tax reform was an issue that would influence their vote at the upcoming Federal election."

A parallel survey of the attitudes to personal tax reform of over 3000 tax practitioners identified overall support for reform but some resistance to changes such as the elimination of work related expenses, even if accompanied by lower tax rates.

Paul Drum, the Director of Policy and Research of CPA Australia, the industry partner in the research project, said he fully understood the wariness of members to commit to such changes. "Many tax agents will naturally feel threatened if much of their bread and butter work were to disappear as a result of tax simplification. It is important that we recognise these concerns and ensure they are properly addressed in any reform package that may emerge."

More information about the symposium is available on the Atax website