This move to reduce duplication and complexity is a welcome step in reducing unnecessary red tape in the economy. However, whilst removing redundant laws is an important part of simplifying the country’s statute books, a crucial aspect of the deregulation equation is addressing the need for wholesale tax reform.
Tax reform is essential to reducing overlap and complexity and moving towards a simple, fair and efficient tax system, and the Federal Government’s much anticipated Tax Reform White Paper is key to kick-starting the tax reform debate.
To ensure that Australia is well positioned for the challenges of the decades ahead, we must work on a tax reform plan now for implementation in the coming years when our budgetary position improves. The benefits of tax reform will flow to all Australians in the form of a stronger economy.
We look forward to the Government setting a clear timetable for the Tax Reform White Paper as soon as possible.
In our recent Federal Budget submission, we called for reform of the taxation of trusts to be dealt with as part of the Tax Reform White Paper. Reform of State taxes, such as stamp duties, to create a more efficient tax system while boosting investment and growth should also be addressed as part of this process.
Reform of the rules governing the taxation of trusts is essential to provide certainty to the thousands of taxpayers that use trusts, reduce compliance costs and prevent outcomes that are inconsistent with the policy intent.
By taking a leadership position on State tax reform, the Government has an opportunity to bring the States on board with a unified vision for tax reform in Australia. Potentially, this could lead to a greater role for consumption taxes such as the GST and replacing inefficient and complicated State taxes such as conveyance duties and insurance duties.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.