The Board of Taxation is a non-statutory advisory body charged with contributing a business and broader community perspective to improving the design of taxation laws and their operation.
Ideas for better tax regulation
An internationally competitive company tax rate
As part of the now defunct Re:think/ Tax White Paper process there was at least one paper showing that reducing the tax burden on businesses lifts productivity, and increases both business' competitiveness and their capacity to grow. Importantly it also creates jobs. Further, the tax incidence of higher company taxes falls on workers as lower wages, less jobs - or even both. For these reasons we support a lower corporate tax rate. Reducing the company tax rate is crucial in a global market-place where many competitor jurisdictions have reduced their corporate tax rate in order to both retain business and attract new investment. Australia’s current headline corporate tax rate of 30 per cent is simply not competitive. Further we cannot assume that other jurisdictions will maintain their current corporate tax rates. It is of note that following the recent Brexit vote the Chancellor of the Exchequer floated the idea of the UK moving to a 15 per cent company tax rate in the near future.
Foreign resident CGT withholding and death
The new foreign resident withholding rules which apply to certain transactions involving the acquisition of interests in Australian real property etc do not appear to deal with the transfer of assets as a result of the death of an individual. As the rules are drafted, it appears that a withholding obligation might be triggered when an individual dies holding Australian real property valued at $2m or more and the property passes to their estate / beneficiaries / other joint tenants. As the vendor is deemed to be a non-resident under these rules unless they have obtained a clearance certificate from the ATO it appears that a liability could be triggered for the estate and/or beneficiaries, with a minimum penalty of $200k being applied. It would be very difficult in practice to deal with this situation through the existing clearance certificate or PAYG variation methods. Perhaps a specific exception needs to be considered.
Whilst the Commonwealth Government has proposed to address integrity concerns with the wine equalisation tax (WET) rebate (by reducing rebate caps and tightening eligibility criteria) , these reforms do not address the underlying problems caused by the WET to the competitiveness Australian wine industry from the needlessly high compliance costs and distortionary economic impacts. Australian industry leaders have identified the WET policy as stymying the industry. The WET is very different to the policies of “old world” wine countries and emerging competitors who (apart from the standard value added tax) impose zero or low amounts of extra indirect taxes on wine. Also, the WET provides a significant competitive advantage to the New Zealand wine industry. The externality costs associated with wine are over stated, and in any event, a WET (or excise) do not target the problem drinkers. If there is a political need to impose an additional indirect tax on the struggling wine industry, a higher rate of GST on wine would be the simplest and better option.
Meetings & events
- 4 Aug 2016 - Board of Taxation Meeting in Adelaide
- 24 Jun 2016 - Board of Taxation Meeting in Sydney
- 20 May 2016 - Board of Taxation Meeting in Canberra