Shift super tax emphasis – accountants

The maturing of the superannuation guarantee regime means it may be time for the Government to review the appropriateness of the removal of the end benefits tax from age 60, according to major accounting group CPA Australia.

In its submission addressing the Tax White Paper discussion points, CPA Australia said the removal of end benefits tax from age 60 may have been appropriate at the time of its announcement as a short term measure but this may not be the case today.

The submission said the measure may have been appropriate at the time of its implementation, because "current and imminent retirees had not had access to a mature SG system".

"However, as the system matures it may be appropriate to rethink this position and consider shifting some of the tax burden from the contributions phase to the benefits phase, albeit with a long transition phase," the submission said.

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It said that, ideally, the most equitable retirement savings system would tax income in the hands of the individual when it was actually received – that is, contributions would be tax exempt, fund earnings would be tax exempt or concessionally-taxed, and benefits would be taxed.

"What is known as the EET model (exempt, exempt, taxed) is the most common taxation model used in the majority of OECD countries," the submission said.

"Australia is unique in taxing retirement savings at all three points."