Retirees buried in the tax paper war

Small businesses are screaming as the February 4 deadline for their 
second quarterly Business Activity Statements (BAS) approaches. But they 
are not the only ones drowning in the GST nightmare. There are thousands of 
retirees and other investors who are grappling with Instalment Activity 
Statements (IAS).

Anyone who recieves more than $8,000 per annum from investments must return 
an IAS every three months.

This applies to workers whose income might be a combination of wages and 
bank interest or dividends or rental income — if the non-wage componenent 
is more than $8,000.

It also affects workers who retired (or were made redundant) with a lump 
sum which has been invested to provide them with income.

Previously, they submitted annual returns like any other taxpayer, and paid 
provisional tax (i.e. in advance of receiving the income) on the non-wage 
or non-superannuation part of their income.

Provisional tax is being abolished.

The tax is now paid after the income is received, but this is done every 
quarter, and means four tax returns a year.

But that is not all, the tax returns are far more complicated than before 
under the new tax system.

The IAS is similar to the BAS that is causing small businesses so much 
angst.

To complete the form you have to read a maze of instructions and then guess 
at what the difference is between a "Pay As You go instalment" and a "Pay 
As You Go witholding" — that's if you have one. Who knows?

Then you have to work out your "deferred company/fund instalment". Add 
these up.

Then fill complete details of your "Credit arising from reduced Pay As You 
Go Instalments"....

Do some more adding up, a bit of taking away. That was the easy page.

Now turn to page 2 — the one that really gives people nightmares.

Fill in your "Instalment income", "New varied instalment rate" ...

There, wasn't that simple!

The Guardian asked one retiree what he thought of the 
Howard/Costello new "simpler" tax system. The first comments are 
unprintable.

"These people ought to be put in stocks so we can all throw eggs at them", 
was the response when further asked for something printable.

"This monstrous, iniquitous tax which is causing many business people and 
individuals tremendous worry and difficulty should be scrapped — and those 
bastards along with it."