Tax concerns mount for NFF, PGA

22 Nov, 2000 03:18 PM
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PEAK farming organisations have called on the Federal Government to withdraw taxation proposals for farming trusts. The NFF Council has called for the Government to withdraw the Entities' Taxation proposals, saying the approach being taken is draconian, discriminatory and will treat farming trusts unfairly. NFF president Ian Donges said the proposal was "totally unacceptable". "In reality, it is a wealth tax and actually taxes unrealised gains, including gains on pre-CGT assets," he said. "In fact, including unrealised gains under the 'profits first' rule will mean double taxation." Mr Donges said the Government's proposals contained significant anomalies and unintended consequences, and would result in a whole myriad of complexities that would make it unworkable. "These measures will have a severe effect on farmers by destroying the business structure that protects the farm. There is no way the farm sector can accept these proposals," he said. The PGA is also alarmed by the new legislation, which could come into effect as early as next financial year. PGA economics chairman Lynne Johnston said the new bill would also destroy the Farm Management Deposit Scheme as an effective risk management tool for farmers. "The Federal Government, prompted by the Ralph Review into taxation reform, is attacking discretionary family trusts as if they were tax avoidance vehicles, when they are merely commonsense arrangements that protect the structure of the farm business," she said. "The Government is putting budget surplus records and debt reduction in front of the livelihoods of many small business operators."

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