Is the Government using ECT breaches to close deficit gap?
Institute of Chartered Accountants in Australia superannuation specialist, Liz Westover has pointed to the latest Australian Taxation Office statistics on excess contributions tax (ECT) as having confirmed just how problematic the regime remains.
In analysis published this week, Westover suggested the Government and the regulators had got it wrong in believing that excess contribution tax contributions would decline as people become more aware of the consequences.
"When concessional contributions were introduced and ECT assessments started being issued, the government and regulators believed that the number of assessments would fall as people became aware of the new rules," she said.
"The latest figures indicate that this is clearly not the case," Westover said.
"ECT was originally introduced simply as a deterrent to people breaching super contribution caps, not a revenue raiser. With the complexity surrounding the caps and the rules around super, it is clear that people are still getting it wrong, and the number of inadvertent errors continues to rise," she said.
Westover said $132.5 million had been raised in 2009-10 financial year from ECT assessments and she was concerned that the 2010-11 figures would be even higher.
"The Government has stated its commitment to a Budget surplus. Is its reluctance to change the ECT linked to the revenue it is collecting," she asked.
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