Institute of Certified Bookkeepers

“ATO could be doing your BAS soon” quoted from ATO Commissioner Chris Jordan, together with further statements might indicate a dream, however there is significant work to be done.

Institute of Certified Bookkeepers admires the vision but sees a reasonably significant journey before it is vaguely achievable.

“The commissioner spoke about this concept in the context of “all your deposits, that’s your income, and all the outgoings, as long as you don’t take private stuff out of there, are your deductions” is a long way from any business reality and a very long way from how GST and income tax law is currently structured.

“all…deposits” into a business’s bank account may or may not have GST on them and may or may not be income; what about the loan in? what about the owner’s contributions? what about input taxed supplies? what about private rent? (to name a few of the simpler complexities).

“all the outgoings….are your deductions” doesn’t account for timing of payments compared to when incurred and doesn’t account for loan repayments among other transactions that are not all tax deductible.

If the tax act became simplified, if GST applied to everything, then just maybe this dream is more real. 

If all industries were the same, if every business conducted themselves exactly the same way, if we all thought and behaved identically then maybe.

In the mean time we see that in order for the ATO to “do your BAS for you” every bookkeeper and accountant will be employed by the ATO to do all the work; the interpretation of what has happened, the allocation of businesses to the right industry, the right benchmarks, identification of anomalous transactions.  The ATO budget increases, the ATO employee numbers skyrocket.

The cost of compliance shifts from business to the Government.   Maybe that’s a good thing.

 

The vision of this simplified streamlined approach to tax requires simplification of tax law.

  • 21 August 2020
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