Tax education in schools not happening early enough, says IPA
The Institute of Public Accountants is concerned that tax education in schools is not taking place early enough.
The IPA said, in its recently released Small Business White Paper, that delayed education on tax impacts on young people’s understanding, some of whom are already launching their small businesses online.
“Small businesses have a range of tax obligations and getting a general understanding of the tax system through primary and secondary school years would prepare prospective entrepreneurs with the tax knowledge they require,” the IPA noted.
Moreover, it said, increasing use of platforms such as Air Tasker, Airbnb and Uber by people who might otherwise not work for themselves, creates an added need for young people to understand the tax system.
“It is critical that students are taught from a young age that a social contract requires people who earn income to pay tax in accordance with the law, so the government can provide services needed by the community,” the institute explained.
Tax education in primary, secondary and tertiary institutions may also encourage students to consider a career as a tax professional.
“There will be a need to ensure enough accounting graduates are able to replace the aging tax agent demographic,” the IPA said.
“This requires a conscious effort by secondary and tertiary institutions to encourage candidates to consider the appropriate studies to become a registered tax agent.”
Additionally, early tax education would minimise the number of people who are taken in by fraudulent tax schemes, the IPA added.
Only half of parents talk tax to their kids
In September this year, the ATO revealed that young Australians’ knowledge of tax and superannuation is low, particularly in relation to the purpose of tax, the ability to complete a tax return and how to seek help about tax and superannuation.
Research launched by the Tax Office found that over half of parents (54 per cent) have not had any discussion around tax and superannuation with their child.
Additionally, it revealed that there are low levels of awareness of tax and superannuation being taught in schools – only 7 per cent of parents are aware of superannuation education, while 13 per cent are aware of tax education.
Contrarily, nine in 10 parents and wider community members said education on tax and superannuation is important.
“Education about tax and superannuation is considered to be an essential life skill. It was recognised that the consequences of no education on these topics would lead to poor financial decisions and, in some cases, limited financial security,” the ATO said at the time.