1. The Board of Taxation’s role in improving the tax system Teresa Dyson Chair, Board of Tax

2. Overview  Board’s function  Tax design issues  Current/recent tax technical reviews  Ministerial Advisory Council for deregulation on taxation matters  Concluding remarks

3. Board’s function To provide advice to the Treasurer on:  Quality and effectiveness of tax legislation and processes for its development, including the processes of community consultation and other aspects of tax design  Improvements to the general integrity and functioning of the taxation system  Research and other studies commissioned by the Board on topics approved or referred by the Treasurer; and  Other taxation matters referred to the Board by the Treasurer

4. Tax design and development Tax design (including consultation) processes have improved, but there is room for improvement  Timeliness of legislation  Quality and quantity of consultation  Involvement of the private sector Collaboration between ATO, Treasury and non-government sector is important – each has roles and responsibilities in serving the national interest

5. Current/recent tax technical reviews  Tax impediments for small business  Division 7A  Thin capitalisation – arm’s length debt test  Debt/equity rules

6. Tax impediments for small business  Fast-track review  Identifying key reform priorities to: ̶ Reduce tax impediments facing small business ̶ Enable small businesses to focus more time and energy on running and growing their businesses  Mix of administrative and legislative issues  Simplification and deregulation priorities

7. Division 7A  Post-implementation review  Consider application of the Division in the broader context of taxation of private companies and distributions from private companies

8. Thin capitalisation – arm’s length debt test  Ease of application and administration  Should access to the regime be limited?

9. Debt/equity rules  Post-implementation review  Related schemes and 974-80  Interactions/non-interactions  International comparison and consider impact on arbitrage opportunities  Structure of legislation

10. Deregulation  Ministerial Advisory Council for deregulation on taxation matters  Fast-track reviews  Assistance to Treasury reviews and scoping studies

11. Concluding remarks  High workload  Different types of work, e.g. longer reviews, short reviews, advice to Treasury, coordinate targeted consultation  Aims: ̶ That government gets high quality advice for making tax policy decisions ̶ That tax legislative products give effect to policy intent in a way that best meets the needs of users of the tax system  Community rightly expects participation in the design of its tax system. With that comes responsibilities to seek a better system overall

12. © Teresa Dyson 2014 Disclaimer: The material and opinions in this paper are those of the author and not those of The Tax Institute. The Tax Institute did not review the contents of this presentation and does not have any view as to its accuracy. The material and opinions in the paper should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests.