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The National Institute of Accountants (NIA) has called on the Government to ease requirements on self-managed super funds (SMSFs) and phase out the contributions tax in its pre-Budget submission.
There should also be further separation between financial product developers and financial advisers in order to ease the perception among consumers that there is a lack of independence in the advice they receive, according to the NIA.
While regular audits of SMSFs were necessary, there was a case for providing three-year exemptions to funds that have a strong reporting history over five years and didn’t exceed a prescribed maximum level of assets.
SMSFs that receive the exemption should have some additional requirements, such as having to supply an annual written statement from an accountant, while an audit would have to be performed between three-year exemptions.
SMSF auditors should also meet mandatory requirements including being a member of a professional body and undertaking a prescribed amount of relevant education, the submission stated.
The contributions tax currently provides a disincentive for people to make voluntary super contributions. Phasing out the tax would minimise revenue loss in the short term, which would then be alleviated by a lower dependence on the Government pension later on, according to the NIA.
The NIA also called for the establishment of an online product marketplace for all financial products provided to consumers, which could then be regulated by the Government. This would clearly separate the roles of financial adviser and product provider, the NIA said.
The NIA also called for a simplification of the personal income tax structure and a review of fringe benefits tax and capital gains tax.
