No advances on super charge
News that the Federal Government has dropped the advance instalments on its unpopular superannuation surcharge has been widely welcomed.
Investment & Financial Services Association chief executive officer Lynne Ralph says the change will affect timing rather than the amount of revenue collected by government.
She says taxpayers will eventually have to pay the surcharge, but they can now hold on to their money a bit longer, earning some return on it. In addition, the funds are better off because they no longer have to establish systems to administer the program.
The advanced instalment system meant that the superannuation surcharge was collected in advance for the forthcoming tax year, based on the previous year's earnings.
According to Philippa Smith, chief executive of the Association of Superannuation Funds of Australia, it was an inefficient tax collection mechanism and an administrative nightmare.
This was largely because it was selectively imposed and didn't allow for members changing jobs or funds. In addition, it created equity and cash flow problems for those taking redundancy or retiring.
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