COSBOA believes it is essential to undertake a comprehensive review of the Australian tax system. The government should be congratulated on the breadth of the approach and the ambition to achieve an outcome.
It is pleasing to see small business receive special attention in the discussion paper. For too long the text book and theory based economists and academics have wanted all businesses to be treated the same in tax and in economic policy. The reality is that we have always had a two tiered tax system due to the ability of large businesses to minimise their regulation requirements and also minimise tax through use of highly paid advisers and the ability to move profits/income off shore to jurisdictions with more favourable tax rates.
Designing a system for all businesses will always mean big business gets its way and small business people have to struggle with extra complexity. This is a change from previous reviews of tax and shows that there is a willingness to embrace the challenges of the new economy.
The focus on removing complexity is also commended – a less complex system is less expensive and encourages business and innovators.
The issue of GST has to be confronted. If we are going to have low or zero company and personal tax then a consumption tax that is supported by all and applied to all needs to be in place. The Howard government gave us GST after decades of debate now is the time to fix the faults and pave the way for use of technology to ease complexity and also give confidence that people and companies will pay their way. COSBOA is happy to lead the way on confronting this issue.
A fair international taxation system is desperately needed by all countries, developed, developing or under developed. This will require the international business community and various country associations to come together and agree on how companies should be taxed and where that tax should go.
In the end innovation will come from entrepreneurs and small business and that is where the future of the economy lies.
COSBOA’s full response may be viewed HERE