Ralph to harvest agricultutal tax schemes
The days of frenzied buying of tax effective agricultural schemes in mid June will soon be over, thanks to the Ralph tax crackdown announced earlier this month.
The days of frenzied buying of tax effective agricultural schemes in mid June will soon be over, thanks to the Ralph tax crackdown announced earlier this month.
And hundreds of small tax-effective schemes could face extinction under the pro-posed changes, according top some industry analysts.
The proposals, dubbed Ralph II, have called for the abolition of the so-called 13 month rule which allowed investors to claim deductions for the year in which they invest whether there is any productive activity done in that year or not.
Under the proposed changes deductions would only be allowed in the year the work is carried out.
Up to 90 representatives of the forestry industry were in Canberra on Monday in a face to face with forestry minister Wilson Tuckey in a bid to lobby the Federal Government over the proposed changes.
Some are concerned that smaller, undercapitalised ventures will be unable to capi-talise their projects before seeking investors which would make it difficult for in-vestors to claim a tax deduction.
Larger forestry firms such as Great Southern Plantations and Timbercorp say their businesses will not suffer as a result of the changes.
“We have been expecting the changes since the first Ralph report was released some months ago,” says Timbercorp corporate general manager Sol Robanovich.
“Those businesses that have a sufficiently strong balance sheet and strong distribu-tion channels will continue to prosper,” says Great Southern chief executive John Young.
However, almost all industry participants contacted by Money Management agree that the days of end of the year tax schemes are numbered.
Robanovich says that this is in some ways a good thing for the industry.
“It will help the reputation of the industry,” he says. “People will need to invest in tax-effective projects which are first and foremost commercially viable.”
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