The Assistant Treasurer, Senator Rod Kemp, today announced initiatives designed to simplify the operation of the Superannuation Contributions Surcharge legislation.
The superannuation contributions surcharge was introduced by the Government in the 1996 Budget as an equity measure to reduce the disparity between the level of superannuation taxation concessions available to high income earners and those available to other Australians. Previously, higher income earners could benefit from the concessional arrangements to a much greater extent than lower income earners.
The surcharge has been effective at meeting the Governments equity objectives.
The initiatives announced today will enhance the overall operation and efficiency of the surcharge, including through clarifying and simplifying aspects of the legislation.
The Government will remove the advance instalment requirement applying to the surcharge, effective immediately. Consequently, no advance instalment will be payable in respect of assessments issued by the ATO from today.
Removal of the advance is consistent with measures taken in the Governments tax reform package, including the abolition of Provisional Tax. The removal of the advance instalment will only affect the timing of surcharge collections and will not involve any ultimate cost to revenue.
Credit in relation to any advance previously paid will be applied to the 1997/98 assessments as provided for by the legislation.
To further reduce compliance costs for self managed funds, the Government will develop proposals to provide a self assessment regime for these funds. These proposals could include arrangements to align surcharge reporting requirements with annual superannuation fund returns and income tax lodgment. This would reduce the administrative burden for the sector and the number of interactions with the ATO.
The Government is also aware of a number of technical issues that have been raised in relation to the surcharge legislation. In order to remove any doubt, amendments will be introduced to clarify, among other things, aspects of the legislation surrounding superannuation providers on "contributions holidays", and the methodology and assumptions for calculating notional surchargeable contributions factors. These amendments will be effective from 20 August 1996.
The Government will consult with key industry and professional groups in developing these proposals.
CANBERRA
23 March 1999
Contact Officer:
Matthew Guy
Assistant Treasurers Office
(02) 6277 7360