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Atax academics are involved in a variety of research
projects. The following is an outline of some of the research. Also, please view our International
Projects.
ARC Linkage Grant 2005-06: Developing
a sustainable personal income tax model for Australia
Chris Evans,
Binh Tran-Nam (with Andrew)
Two senior Atax researchers, Professor Chris Evans and A/Professor Binh Tran-Nam, together
with Professor Brian Andrew (University of Canberra) have
recently been awarded an Australian Research Council (ARC)
Linkage grant to develop a sustainable personal income tax
(PIT) model for Australia. This project has attracted a funding
pool of approximately $300,000 over two years (2005-06) from
the ARC and CPA Australia.
PIT is a crucial component of the Australian tax system, largely
untouched by the recent (primarily business and indirect)
tax reform.It currently faces a number of serious defects.
Solutions need to be found to a variety of problems relating
to the tax base, tax rate and tax administration.
The project will explore alternative PIT models that can sustain
high revenue inflows and together expectations imposed upon
it, and yet deliver enhanced equity, efficiency and simplicity.
By testing these models against world best practice and taxpayer,
tax practitioner and tax administrator resistance, the project
aims to deliver a PIT model that can attract widespread community
support and achieve traditional tax policy goals.
As a result of this ARC Linkage Grant, Atax is seeking to
appoint an Australian Postgraduate Award Industry (APAI) Research
Student.
> More information [PDF]
Survey of effect of taxation on
investment management
Gordon Mackenzie
The aim of the research is to examine the impact of taxation
on the portfolio returns of fund managers. Typically, returns
are assessed on a pre-tax basis, however, vagaries in the
tax law mean that identical pre-tax returns can be different
for post-tax returns. This study aims to examine and quantify
to what extent fund managers have "destroyed value"
by not considering taxation effects on particular transactions.
Anecdotal evidence suggests that investment returns can be
improved by 2% once taxation considerations are taken into
account. This has relevance for mutual funds industry, whereby
such additionally returns can have a significant impact on
the performance and ratings of a fund. Unit holders will also
benefit from such insight, with the potential for greater
returns.
The expected outcome is that managed funds are able to significantly
improve the returns to unit holders by considering post-tax
returns on transactions or anticipated transactions. The findings
will also have policy implications regarding any horizontal
fiscal inequity in the tax law.
Bookkeepers Association Project
Garry Payne,
Kalmen Datt, Shirley Carlon
Atax is working with the Australian Association of Professional
Bookkeepers (AAPB) and Innovation and Business Skills Australia
to develop a nationally recognised Certificate IV qualification
for bookkeepers. The new qualification is BAS specific and
will provide bookkeepers with the appropriate knowledge required
to perform BAS related services.
An examination of the impact of
the case of R v Pearce & Ors on professional ethics of
taxation advisors.
Helen
Hodgson
In July 2004 two taxation advisors were convicted by jury
of criminal conspiracy. They were sentenced to 5 years imprisonment.
The decision was upheld on appeal.
Helen will examine this case, identifying the ethical and
other issues that affect professional advisors acting on a
brief. Did the advisors apply professional standards? Are
these standards adequate, or should they be strengthened?
To date there has been limited examination of this case,
and there is little professional awareness of the implications,
which could affect the way in which professionals in a number
of disciplines relate to their clients.
A critical analysis of the application
of the general attribution rule in the GST with particular
reference to security deposits, stakeholders and conditions.
Kalmen
Datt
The Attribution rules in the GST legislation determine
when taxpayers are liable to account for GST. This concept
permeates the entire GST system and as such a proper understanding
of how and when attribution occurs is important. It seems
as if the Commissioner may be applying the law incorrectly
in certain aspects and it is for this reason that this project
is being undertaken.
The project will consider:
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The application of the general attribution in regard
to methods of discharging obligations;
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Whether the Commissioner interprets the law correctly
and in particular whether the law relating to security
deposits, stakeholders and conditions is correctly applied;
and
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Any recommendations to resolve any difficulties encountered.
This includes determining
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What is meant by payment, an act and forbearance
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The validity of the Commissioner in Australia's application
of Division 99 of the relevant GST statute and how this
impacts on contracts generally and sales of land particularly.
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Suggesting the proper methodology of dealing with security
deposits.
Identification of the Inoperative
Provisions of the 1936 and 1997 Income tax Assessment Acts
Bob Deutsch,
Maurice Cashmere,
Garry Payne,
John Raneri
and Kalmen Datt
As announced by the Board of Taxation, Atax has been engaged
to confirm identification of the inoperative provisions of
the two Income Tax Assessment Acts.
This followed consultancy work undertaken for the Board in
2004 which resulted in a list of provisions of the 1936 and
1997 Income Tax Assessment Acts that are thought to be inoperative.
Atax is analysing the candidate inoperative provisions to
confirm they have no residual operation.
Atax is also analysing cross references in Commonwealth legislation
and regulations to candidate inoperative provisions and the
scope of definitions referring to these provisions to ensure
they do not cause the candidate provisions to have continuing
effect.
A review of income tax self-assessment
law in Australia
Michael Walpole
Although income tax self-assessment has been in place
in Australia since 1988, there are numerous problems with
it. Much so-called self assessment requires the intervention
of the Commissioner of Taxation. Several legal provisions
relating to assessment, and the common law rules around them
pre date self-assessment and result in inappropriate (some
times absurd) outcomes for taxpayers. Some taxpayers' returns
are truly self-assessments, some are not. Some taxpayers with
nil tax payable are secure in the knowledge that their returns
can be amended within 4 years but not thereafter. Others with
nil assessments are indefinitely open to an assessment being
raised at any time in the future. Some are beginning to challenge
this uncertain state of affairs, especially because it means
commercial entities cannot be certain of their liability for
taxation in respect of past years of assessment.
The project will review the legislative provisions and cases
on self-assessment; the intention of Parliament as expressed
in Explanatory Memoranda; and will attempt to reconcile the
conflicting principles involved. The conclusions for Australia
will be compared with the self-assessment regime recently
(1998) introduced in the UK in order to identify any points
of best practice.
The research will then examine the Federal Treasury Review
of Self Assessment ("ROSA") in Australia and the
submissions to it to. The research will result in firm suggestions
for the reform of self assessment in Australia that are not
influenced by Treasury's vested interest.
Developing a Learning Culture
in a Tax Administration
Jacqui McManus,
Kate Collier
This project will involve the collection and analysis of data
regarding the effectiveness of learning partnerships in developing
a learning culture and ultimately a learning organisation
in a tax administration, using the Australian Taxation Office
(ATO) as a case study. The aim of this research is to identify
the reasons for the successes and failures of the use of learning
partnerships in a training program and the key issues requiring
further research.
Access to and operating costs
of tax dispute resolution in Australia
Binh Tran-Nam
Despite the rising interest in tax compliance costs
and tax simplification, very little is known about the accessibility
to and costs of tax dispute resolution in Australia. This
project has three separate aims. Firstly, it examines the
trend of accessibility to tax dispute resolution by taxpayers
(particularly personal taxpayers) in Australia. Secondly,
it attempts to provide some quantitative estimates of the
costs for resolving tax disputes in Australia. Finally, it
makes a preliminary investigation of the number and extent
of tax disputes due to the GST-based tax reform. The findings
of the project will provide useful information to the ongoing
tax reform process in Australia.
Post-reform capital taxation
in Australia
Binh Tran-Nam
Australia has entered the new century with a substantially
reformed tax system. Business taxation reform in Australia
is still an on-going process. However, many of the changes,
whether proposed or implemented, are being made in the absence
of quantitative assessment of the effects of both the old
and new tax regimes. It is important that future taxation
policy in Australia be guided by up-to-date and valid empirical
findings.
The research is concerned with taxation of capital income
in Australia, particularly since 2000. Its primary aim is
to provide updated information about capital taxation in Australia
and a preliminary evaluation of the efficiency impacts of
tax reform on capital taxation in Australia. International
comparisons, whenever possible and relevant, will also be
made.
Evaluation of the compliance
and administration costs of the Small Business CGT Concessions
Chris Evans,
Binh Tran-Nam
(with Cooper)
The Board of Taxation has, as one of the functions under its
Charter, the task of reviewing legislation to assess its quality
and effectiveness. Such a review, known as a 'post-implementation'
review, is directed at establishing if the legislation is
having its intended effect and to determine if its implementation
can be improved, rather than re-examining the policy behind
the legislation.
The second such review undertaken by the Board is of Division
152 of the Income Tax Assessment Act 1997 (ITAA 1997), titled
"Small Business Relief" (commonly referred to as
Small Business Capital Gains Tax Concessions). Part of the
post-implementation review of the Small Business CGT Concessions
is the commissioning of this project, prepared by Associate
Associate Professor Binh Tran-Nam, Professor Chris Evans and
Adjunct Professor Gordon Cooper of Atax, part of the Law Faculty
of the University of New South Wales, to estimate and evaluate
the compliance and administrative costs arising from Division
152 of the ITAA 1997.
Research and Recommendations on
Definition of Small Business
Neil Warren,
Garry Payne
and Helen
Hodgson
This research focuses on a key aspect of increasing simplicity
in relation to small business tax concessions – improving
access and reducing compliance costs through consolidating
and simplifying the definition of small business, to the maximum
realistic extent, in Australia’s income tax (including capital
gains tax (CGT)), fringe benefits tax (FBT) and goods and
services tax (GST) legislation.
Corporate governance and tax –
the obligation of directors
Kalmen Datt
In 2004 the Commissioner of Taxation wrote to the chairmen
of a number of public companies requesting a more active role
in making decisions about tax planning and the manner in which
the companies they represented were tax compliant.
It is essential that directors of companies and other public
officers are aware of their rights and obligations in this
field. There is a significant amount of legislation surrounding
this topic and decisions of the courts.
This paper considers the legislation and cases in the field
with a view to reaching a considered opinion to determine
the extent that the companies they represent are tax compliant
and whether the duty of directors and public officers of companies
is as broad as the Federal Commissioner of Taxation has suggested
in various public statements.
This issue has national and possibly international ramifications.
Critical analysis of new tax laws
to deter promoters of tax exploitation schemes
Rachel Tooma
This research examines the recently enacted Australian promoter
penalty provisions, which are aimed at reforming old taxes
in order to address new world economic and social developments.
Such developments include empirical evidence linking investment
by taxpayers in tax exploitation schemes, to the activities
of promoters. In order to assess the effectiveness of the
promoter penalty provisions as a means of reforming old law,
the research critically examines the promoter penalty provisions.
It also compares the approach of the promoter penalty provisions
to the approach of other jurisdictions to promoters of tax
exploitation schemes, including New Zealand, Canada, the US
and the UK.
A critical examination of the
application of the income tax exemption for charitable institutions
to entities established for the advancement of Australian
indigenous people
Fiona Martin
This research involves an examination of the application of
the income tax exemption provisions for charities to entities
that seek to advance Australian indigenous people.
An emerging and significant issue for Australian traditional
land owners is the establishment of commercial entities to
undertake their traditional and business operations. These
operations include the application for and management of native
title land, the preservation of cultural and social activities
and the operation of commercial businesses that benefit indigenous
people. In order to ensure optimum outcomes for the land owners,
taxation and commercial issues must be considered. This research
will critically examine the income tax provisions to determine
in what situations such entities can take advantage of the
exemption from income tax of ‘charitable institutions’.
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