Case for lowering SMSF levy
The self-managed super fund (SMSF) levy could reduce significantly in the May budget after recent federal government measures oversaw the clearing of a backlog of tax amendments.
That is according to senior manager, technical and policy at SMSF Professionals' Association of Australia (SPAA) Jordan George, who said the SMSF levy is a cost-recovery system for the Australian Taxation Office (ATO).
But with the measures slashing the number of SMSF programs being offered, George believes there is a solid case for decreasing the levy.
"These measures — such as related party transactions, SMSF bank verification, SMSF roll-overs being included as a ‘designated service' under the Anti-Money Laundering and Counter Terrorism Financing Act 2006, and taxing super benefits received illegally at the top tax rate — are no longer part of the SMSF architecture, so it seems fair to assume the cost of administering the SMSF sector has fallen accordingly," he said.
"In addition, the Government's announcement on clearing the tax amendment backlog pointed to the levy being adjusted to address these changes, and SPAA would urge it to do so in the lead-up to the Budget and then make the appropriate announcement."
Assistant Treasurer Arthur Sinodinos announced in December last year the Government had completed the consultation process over the backlog of 92 announced but unlegislated tax and superannuation measures.
"The ATO has agreed to provide evidence for the most recent increase in the levy and why the cost-recovery process for SMSFs had increased, but the industry has yet to see the evidence," George said.
He acknowledged SMSF trustees should pay a levy and said the ATO should be involved in the review as it is most familiar with the costs involved.
"We firmly believe that the levy should accurately reflect the ATO's costs in administering the SMSF's superannuation obligations and, as such, should be revenue neutral," he says.
AUTHOR
Staff Writer
Recommended for you
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
