Labor’s estimations on accountants’ fees for providing tax advice are based on a sample size so small that it could be producing “grossly overstated averages”, the Institute of Public Accountants (IPA) has claimed, warning that there has been “significant misinformation” spread around the topic.
The Institute’s chief executive, Andrew Conway, said that the figures cited by the Labor party were based on a very small sample and that “in themselves do not justify a policy of capping deductions for tax advice”.
Further, he said that were the numbers used based on aggregated data, they could be overstating averages to the degree that the data was misleading the public as, were this the case, Labor’s predicted savings wouldn’t be realised.
“You can polish the crystal ball as much as you like, it doesn’t mean you will see future savings,” Conway said, calling on Labor to explain the “facts behind the figures”.
“It is misinformation to say that only the rich can access tax deductions; these are accessible by all Australians. It is highly inappropriate to have a universal cap for all taxpayers as circumstances differ; a one-size- fits-all is inequitable.
“Our tax system is complex. Denying deductibility for seeking advice from a trusted adviser is inappropriate.”
Conway also said that the Australian Taxation Office (ATO) data used to reach the estimations was based on the 2016-17 financial year, meaning the label in the income tax return that made up these figures included adviser fees, ATO interest charges and litigation costs.