The Tax Institute urges treasurer to provide clarity on zombie tax measures

Ahead of the federal budget next month, The Tax Institute says it has catalogued 14 tax measures that have been publicly announced and, in some cases, consulted on, but then left to stall.

The institute said it is calling for urgent action from the government on several of these measures that continue to create uncertainty and increase compliance costs for taxpayers and practitioners.

"Some of these measures were announced during the last term of Parliament, and others were announced many years ago. In some cases, there is little more than a media release; in others, the government has released a consultation or discussion paper. But in all cases, no new law has been enacted, even though some measures have announced start dates that have already passed," it said.

"The Tax Institute urges the Government to confirm whether these measures will progress or be abandoned, so taxpayers and practitioners can plan with confidence and certainty."

One of the stalled measures, which was announced last year, is the proposed $1,000 instant tax deduction.

"It was announced during the 2025 Federal election campaign but has not advanced beyond its initial announcement, though it is expected that this measure is likely to be reannounced in the upcoming budget," the institute said.

A proposal from the 2022–23 federal budget to enable monthly or quarterly electronic lodgment of Taxable Payments Reporting System data has also failed to progress, despite its potential to streamline compliance.

"Similarly, funding announced in the March Federal Budget 2022–23 to support data sharing of Single Touch Payroll information between the ATO and State and Territory Revenue Offices has not advanced," it said.

The government has also failed to provide any update on the targeted amendments to the Division 7A deemed dividend rules that were announced in the 2016–17 federal budget and consulted on in 2018.

The Tax Institute said these rules are one of the most complex and confusing areas of tax law.

"Proposed reforms to Division 7A have been deferred multiple times, resulting in ongoing uncertainty and continued high compliance costs for taxpayers," it said.

The government is yet to respond to several reviews undertaken by the Board of Taxation and commence consultation on key recommendations from these reviews.

This includes reviews into capital gains tax rollovers, the introduction of asset merger rollover relief, a review into the income treatment of certain forms of deferred considerations and the fringe benefits tax compliance cost review.

The government has also not confirmed whether it will proceed with consultation on FBT car parking benefits, originally announced in March 2022.

"Employers remain uncertain about their obligations. This uncertainty has been compounded by the Federal Court decision in Toowoomba Regional Council v Commissioner of Taxation, in which the Court held that a shopping-centre car park was not a commercial parking station for FBT purposes because it was not operated commercially for profit," The Tax Institute said.

"The Commissioner has appealed this decision. As a result, ongoing ambiguity remains for employers seeking certainty in the treatment of car parking fringe benefits."

The Tax Institute’s head of tax and legal, Julie Abdalla, said there has been a pattern of inaction by the government, promising taxpayers change but not following through.

"Time and time again, we’ve seen tax measures promised in Federal Budget announcements that are then ignored for years. Until the government resolves the long list of outstanding measures and establishes a process for ongoing system maintenance, we will not see real progress on the productivity agenda or efforts to cut red tape," Abdalla said.

“If the government does not intend to proceed with certain announced measures, they need to come out and say so explicitly.”

Abdalla said The Tax Institute wants to hear genuine tax reform announced in the upcoming budget and assurance that what’s announced will actually be delivered promptly.