Tax reform is now a key part of the Government’s policy agenda

Re:think is a shared conversation about Australian tax reform - image

Re:think is a shared conversation about Australian tax reform

With the changes of the world economy in recent decades, tax reform is now a key part of the Government’s policy agenda.

Treasurer, Joe Hockey, released a tax discussion paper, called ‘Re: think’ on 30th March.

What is re:think?

Re:think is an invitation for Australians to join a discussion with government on Australia’s tax system.

The paper is a detailed examination of Australia’s taxation system across all levels of government and while there are no proposals being promoted by the government as a wish list, the re:think paper makes some interesting observations including:

  • “corporate tax rate of 30 per cent is high compared to many countries we compete with for investment, especially those in the Asia-Pacific region”
  • “While company tax is paid by companies, the burden is passed on to shareholders, consumers and employees.”
  • “Australia’s aggregate tax burden is relatively low compared to other developed economies, but higher than some of our major regional trading partners.”
  • “The major sources of state tax revenue are payroll taxes and stamp duties.”
  • “The continued appropriateness of the rationale for, and size of, the CGT (capital Gains Tax) discount is posited as a question for consideration.”
  • “Australia’s GST (goods and Services tax) rate is one of the lowest among developed countries and is roughly half of the average rate among OECD (Organisation for Economic Co-operation and Development ) countries. Of the 33 countries in the OECD that operate taxes like the GST (known more generally as value added taxes or VATs), only Canada, Japan and Switzerland have lower rates.”
  • “Economic modelling suggests that the taxes with particularly high costs to economic growth are company taxes and stamp duties.”

To join the conversation, go to the ‘better tax’ website www.bettertax.gov.au.

Re:think final date for formal submissions

The formal submissions process for this discussion paper starts now. You have until Monday 1st June 2015 to lodge your formal submission at the website www.bettertax.gov.au.

In the meantime, please feel free to contact one of our accountants at our Epping office for current tax advice.