mms another political gutser?

The revelation from the working group
" Not for Profit Tax Concessions"
has not been revealed to the market but its recommendations will be catastrophic to MMS if adopted.

Under the groups recommendation there are a number of items which relates to charities and the rules which apply to donaions, tax liabiity as well as the issue of salary packaging.

The nub of their findings will see meal entertainment benefits scrapped so as to eliminate the excesses of having a wedding reception made a tax deductible experience and to reign in the tax deductible lunches for the big end of town.

As well it addressed the anomaly whereby specialist doctors employed by more one health district are able to be entitled to multiple times the current tax free cap of $17000. sic a specialist who was a visiting consultant to four hospitals (not uncommon) would have a cap of $68000 tax free entitlements.

The most devastating proposal for salary packaging administrators such as Macmillan, the recently list SG Fleet as well as companies such as Fleet Plus Selectus Salpac would have their administration fee revenue abolished.

The Working group claims of simplifying the whole system via a government grant to Not for Profit and State Hospitals and Ambulance services would see employees access current benefits without the need of an intermediary such as MMS.

MMS has successfully used the salary packaging relationship, as well as the right for BDM's to have almost exclusive and guaranteed access to the potential car leasing employee data base, for whom they afford salary packaging, administration, to grow its reach over the past ten or so years.

It follows that the abolition of this intermediary role and the loss of access to employee contact has potential to have an even greater effect than the proposal to interfere with the FBT arrangement on car leasing announced by the Rudd government.

At a time of scrounging tax savings in this current era it is difficult to see why this report won't be given serious consideration by the bean counters looking for increased revenue streams.

Politically it is difficult to see a government perpetrate a regime of such fiscal imbalance between tax payers.

Why can a wardsman in a hospital receive a $17000 FBT benefit while his next door neighbor working as a storeman faces a tax bill at least $3,000 greater.

MMS are likely to face more troubling times in relation to their business model within this area of its operations.

Shorts are on the rise and the ASX ought be seeking clarification from the company in respect of this development.

Buyer and holders beware.


iSHMAEL