The National Institute of Accountants (NIA) is calling on the Government to explain its critical comments regarding Self Managed Superannuation Funds (SMSFs) being used as a ‘tax minimisation’ vehicles.
The Government released Red Book states that, “The superannuation system is increasingly leaking revenue, with Self Managed Super Funds now the tax minimisation vehicle of choice.”
The NIA is concerned that Australia’s 800,000 SMSF members may be targeted as tax avoiders, contradicting the findings of the recent Cooper Review which was complimentary towards the compliance and performance of the SMSF sector.
The Cooper Review stated that SMSFs, “While significant changes are not required, there are still a number of noticeable issues, which, for the most part, do not directly relate to trustees and members, but instead to service providers and the wider regulatory framework^.”
NIA’s chief executive officer Andrew Conway said that the Government’s Red Book comments were too judgmental of SMSF members and does nothing to reverse the unjustified negative misconceptions about SMSFs.
“Self Managed Superannuation Funds were introduced by the government to encourage individuals to save for their future retirement. Over the past three years, SMSFs have provided better returns than other professionally run larger superannuation funds especially during the GFC.”
“SMSFs have the same level of compliance as other superannuation funds and are subject to compulsory annual audits by approved auditors. Largely, SMSFs are subject to the same rules as all other types of superannuation funds and do not get special tax treatment.”
“Labelling SMSFs as tax minimisation vehicles contradicts the reasons why they were initially introduced. SMSF members are often small business people and high net worth individuals who are financially savvy and are able to work within the rules and use such structures more effectively than larger superannuation funds; allowing members to have better control over their financial future.”
“Superannuation is a long term investment and comments such as these appear at odds with the Government’s own policy.”
