No Relief in Business Tax Reductions
Australian businesses have no relief in sight as efforts to cut company tax amounts are nothing more than a light ‘tinkering’.
Business leaders are frustrated by the government asking corporate Australia to give up billions of dollars in tax breaks to fund a reduction in the 30 per cent company tax rate.
Senior tax adviser at the OECD, Richard Highfield, said the proposition was not a reduction to the overall tax burden, but rather just a bit of tinkering to lower the marginal rate,”
The business community was told it could have a tax cut agreed by Christmas, but only if it could be offset by other savings.
Mr Highfield questioned the value of “revenue neutral” company tax cuts, saying they would have a limited impact in terms of making Australia more attractive to entrepreneurs.
“I think because this exercise is largely intended to be tax neutral, then it clearly can’t be as attractive as a set of proposals that over time reflect a change in the tax mix,” he said. Mr Highfield said these were his personal views and not necessarily those of the OECD.
Former Treasury boss Ken Henry reviewed the tax and said he envisaged lowering this burden to helping Australia remain competitive.
“Wiping out business tax breaks, however, would do little to change the tax equation facing investors,” he said.
Mr Highfield said it was “unlikely” the current tax mix could support future spending, and expressed frustration at the limited debate.
Business tax benefits that could be cut to fund lower company taxes include support for research and development and mining tax breaks, an advisory group said this month.