The National Institute of Accountants (NIA) has called on the government to explain its critical comments regarding self-managed superannuation funds (SMSFs) being used as tax minimisation vehicles.
The government’s Red Book said the superannuation system is increasingly leaking revenue, with SMSFs 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 government’s comments were too judgmental of SMSF members and did nothing to reverse the unjustified negative misconceptions about SMSFs, NIA chief executive officer Andrew Conway said.
“SMSFs 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 [global financial crisis],” he said.
“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.”
Conway said 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,” he said.
“Superannuation is a long-term investment and comments such as these appear at odds with the government’s own policy.”
