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Superannuation fund trustees have been warned to become more aware of the tax impacts on member investment returns or face scrutiny by the regulator.
Consultant and taxation specialist Gabriel Szondy told the Association of Superannuation Funds of Australia conference in Melbourne that tax represents the second largest cost incurred by funds.
He said despite this, tax was the area least understood by trustees.
“Most trustee simply don’t know how or where tax arises,” Szonty said.
Further, he claimed that fund executives also knew too little about tax.
Responding to the session by Szonty, Australian Prudential Regulation Authority manager Ramani Venkatramani confirmed the regulator’s interest in taxation issues and its preparedness to act.
He said it was very sobering that super funds seemed only to turn their attention to deferred tax issues in times of market downturn rather than in upturns.
