The accuracy of the content is not guaranteed. Please rely only on the authorised document. The Chief Executive Officer of the Institute of Chartered Accountants in Australia (ICAA), Stephen Harrison, has called for a postponement of the so- called Tax Value Method of calculating taxable income, or Option 2. The ICAA has been a positive contributor to the entire tax reform process, including contributing to work being progressed to fine-tune the proposals contained in the Review of Business Taxation (the Ralph Report), but welcomes welcomes the Treasurer's recent commitment to consult further with business on the timing of the introduction of Option 2. "Whilst the ICAA is not opposed to the concept, the limited education campaign to date has not yet convinced the ICAA that the proposal delivers demonstrable benefits, particularly in terms of simplicity, over the current system. Also, the clear message coming forward from the Institute's members is that they, and their clients in the community, are struggling to cope with the interpretation and administration complexities of GST and PAYG. In that light, it is too big an ask of the community to expect them to also absorb another round of changes during this first year of GST, to be ready for a completely new and untested basis of taxation on 1 July 2001." A survey conducted at the end of May by the ICAA found that 90% of respondents have fallen behind with their lodgement program because of the additional work generated by the first phase of tax reform changes. The survey also found that almost three-quarters of respondents in public practice did not have enough staff to service their client base, and some 40% had been forced to reduce their client base by some extent. Whilst the majority were reasonably confident that they could advise their clients on the first phase of tax reform, only 59% of respondents described themselves as being "reasonably familiar" or "very familiar" with the second phase of tax reform. Some 70% also indicated that they were either "slightly against" (21%) or "strongly against" (52%) the second phase proposals. Mr Harrison said the survey provided statistical backing to support the anecdotal evidence that the profession is experiencing serious difficulties in coping with the tax reform timetable. "Whilst the ICAA is prepared to continue discussions on the Tax Value Method at a conceptual level, practical issues of implementation cannot be ignored. Foremost amongst these is the timetable for tax reform and the ability of the accountancy profession overall to properly service its client base. The issue is whether the system as a whole can cope with the timetable for change and our members are telling us that it cannot". "A sensible outcome would be to postpone Option 2 until the present changes are bedded down", said Mr Harrison. "We would also hope that further consultation on tax reform is conducted in a more open forum, without the need for the confidentiality measures that have in the past constrained our ability to broaden the debate within the tax professional community."
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